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India’s Corruption Scandals: A Global Spotlight on Systemic Issues

ByAnindya Nandi

Apr 21, 2025 #Business, #corruption, #Defense, #global, #india’s, #issues, #national, #news, #scandals:, #spotlight, #systemic, #world

India’s struggle with corruption has increasingly captured international attention, casting a shadow over its reputation as a global economic powerhouse. High-profile cases involving multinational corporations and prominent Indian conglomerates have exposed systemic issues, raising questions about governance, transparency, and the rule of law. These scandals, often prosecuted abroad while seemingly ignored domestically, highlight a troubling disparity in accountability and enforcement. Below, we explore recent corruption cases, their impact on India’s global standing, the selective nature of domestic enforcement, and the broader consequences for citizens, while reflecting on unfulfilled promises to combat corruption.

Major International Corruption Cases Involving India

Several recent cases have underscored the pervasive nature of corruption in India’s business and public sectors, with international investigations bringing these issues to light:

  1. Adani Group Bribery Allegations
    In November 2024, U.S. prosecutors indicted Gautam Adani, chairman of the Adani Group, and seven associates, including his nephew Sagar Adani, for allegedly orchestrating a $265 million bribery scheme to secure solar power contracts with the Indian government. The scheme, linked to Adani Green Energy, involved bribing officials to ensure state electricity distributors purchased power from the Solar Energy Corporation of India (SECI), projecting $2 billion in profits over 20 years. The U.S. Securities and Exchange Commission (SEC) also filed civil charges, alleging Adani misled U.S. investors by concealing the bribery while raising over $3 billion in loans and bonds, including $175 million from U.S. investors. The Adani Group has denied the allegations, calling them “baseless” and vowing legal recourse. The case has triggered significant fallout, with Adani Group stocks losing ₹2.3 lakh crore in market value and international partners like TotalEnergies halting investments.
  2. Moog Inc. and Hindustan Aeronautics Limited (HAL)
    Moog Inc., a U.S.-based manufacturer, was found by the SEC to have paid over $500,000 in bribes to officials at Hindustan Aeronautics Limited (HAL) between 2020 and 2022 to secure contracts. Employees of Moog’s Indian subsidiary, Moog Motion Controls Private Limited, funnelled payments through third-party agents, falsely recording them as legitimate expenses. Moog settled the case by paying approximately $1.68 million in fines, including disgorgement and penalties, to avoid prosecution. The case highlights vulnerabilities in India’s defence sector, where state-owned enterprises are prime targets for illicit payments.
  3. Oracle Corporation and Indian Railways
    Oracle Corporation faced SEC charges for paying $6.8 million in bribes to secure business with Indian Railways and entities in the UAE and Turkey between 2014 and 2019. In India, Oracle’s sales employees used excessive discount schemes, with $330,000 funnelled to an entity known for paying state-owned enterprise officials and $62,000 to an entity controlled by Oracle employees. Oracle settled the case by paying a $23 million fine to the U.S. Treasury. The case exposed corrupt practices within India’s railway sector, a critical public infrastructure.
  4. Albemarle Corporation and Indian Oil Corporation (IOC)
    Albemarle Corporation, a U.S. chemical supplier, paid over $63.5 million in bribes to secure contracts with Indian Oil Corporation and companies in Indonesia and Vietnam between 2009 and 2017. In India, Albemarle paid $1.14 million in commissions to intermediaries, yielding $11.14 million in profits. The company settled with the SEC in September 2023, paying a $198 million fine to avoid prosecution. This case underscores the prevalence of bribery in India’s energy sector, where large state-owned entities are susceptible to corrupt practices.

Impact on India’s Global Business Reputation

These scandals have significantly tarnished India’s image as a reliable destination for international business. When global corporations like Oracle, Moog, and Albemarle are implicated in bribery to secure contracts, it reinforces a perception that corruption is a prerequisite for operating in India. The Adani case, in particular, has drawn scrutiny due to its scale and the involvement of U.S. investors, amplifying concerns about governance and transparency in India’s corporate sector. The fallout—cancelled bond offerings, halted investments, and negative credit outlooks from agencies like Moody’s and Fitch—signals a loss of investor confidence, potentially increasing the cost of capital for Indian firms.

Moreover, these cases fuel narratives of systemic corruption, as highlighted by Transparency International’s Corruption Perceptions Index, which shows India’s ranking worsening from 76th in 2015 to 93rd in 2023. This decline reflects growing international scepticism about India’s ability to curb corruption, which could deter foreign direct investment and hinder economic growth.

Selective Enforcement and Political Weaponisation

A striking feature of India’s corruption landscape is the apparent selective enforcement by domestic agencies like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and Income Tax Department. Critics argue these agencies disproportionately target opposition leaders, often with flimsy evidence. For instance:

  • Arvind Kejriwal and Manish Sisodia, leaders of the Aam Aadmi Party, faced prolonged detention on corruption charges, with critics citing a lack of concrete evidence.
  • Since 2014, 995 cases have been filed against opposition leaders by agencies like the ED, but the conviction rate for ED cases is a mere 6.42%, suggesting many accusations don’t hold up in court.
  • High-profile figures like Ajit Pawar, accused of corruption, saw investigations stall or disappear after aligning with the ruling Bharatiya Janata Party (BJP).

This selective targeting contrasts sharply with the lack of domestic action against figures like Gautam Adani, despite international indictments, fueling allegations of political protectionism.

International Prosecution vs. Domestic Inaction

A disturbing pattern emerges where corruption cases involving Indian entities are prosecuted abroad but ignored domestically. The Adani case, pursued by U.S. authorities under the Foreign Corrupt Practices Act (FCPA), exemplifies this. Similarly:

  • The Rafale deal, a defence contract between India and France, is under investigation in France for alleged corruption, with no parallel probe in India.
  • Fugitives like Vijay Mallya and Nirav Modi, accused of massive financial fraud, face legal battles abroad while Indian authorities struggle to secure their extradition or prosecute related cases effectively.

This disparity suggests a reluctance or inability to address high-level corruption within India, possibly due to political influences or institutional weaknesses. The Indian government’s response to the Adani indictment—that it’s a “legal matter” between private firms and the U.S. DOJ—further underscores this hands-off approach.

The Cost to Indian Citizens

Corruption extracts a heavy toll on ordinary Indians, inflating the cost of public projects and degrading infrastructure quality. For example:

  • A road project budgeted at 5 crore rupees might see only 1 crore spent on actual construction, with the rest siphoned off through bribes and kickbacks.
  • Inflated costs for projects like highways, hospitals, or power plants are ultimately borne by taxpayers, who also suffer from substandard services.

This misallocation of resources enriches corrupt officials and connected elites while depriving citizens of quality infrastructure and services, perpetuating inequality and eroding public trust.

Modi’s Unfulfilled Promises

In his early tenure, Prime Minister Narendra Modi pledged a robust fight against corruption, famously promising to tackle black money and even suggesting he’d hire “100,000 young people” to strengthen anti-corruption efforts. However, a decade later, critics argue these promises remain largely unfulfilled. The persistence of high-profile scandals, coupled with selective enforcement, has led to disillusionment. Posts on X reflect public frustration, with users accusing the Modi government of enabling corruption through policies favouring corporate allies like the Adani Group.

Additional Context: Broader Implications

Beyond the cases mentioned, India’s corruption challenges intersect with its geopolitical and economic ambitions. As India positions itself as a counterweight to China and a hub for global investment, persistent corruption scandals undermine its credibility. The Hindenburg Research report in January 2023, which accused the Adani Group of stock manipulation and fraud, sparked a $150 billion market value loss and foreshadowed the U.S. indictment. Such events highlight vulnerabilities in India’s regulatory framework, particularly the Securities and Exchange Board of India (SEBI), which faces criticism for inadequate oversight.

Globally, the fallout extends to India’s international projects. Kenya cancelled $2.5 billion in Adani-led infrastructure deals, and Bangladesh is reviewing Adani power contracts, signalling a ripple effect on India’s regional influence.

India’s corruption scandals, prosecuted abroad while seemingly ignored at home, reveal a troubling disconnect in governance. The Adani Group, Moog, Oracle, and Albemarle cases underscore a systemic issue where bribery appears embedded in business dealings with state entities. Selective enforcement, political protectionism, and weak domestic action exacerbate the problem, damaging India’s global reputation and burdening citizens with the costs of corruption. As Dr. B.R. Ambedkar warned, even the best Constitution falters if those implementing it are dishonest. Without genuine reform, India risks squandering its economic potential and global standing, leaving its citizens to bear the consequences of a system handed over to the unscrupulous.

References

By Anindya Nandi

Anindya Nandi is a Veteran of the Indian Navy. An IT graduate from Mumbai University, Served the Navy for 15 years from 1996 to 2011. Took part in Operation Talwar (Kargil War) and was in a support team during Operation Parakram. Visited 12 foreign nations while serving as a part of Indian goodwill visit to Foreign Countries. Trained in Nuclear Biological and Chemical Defence and Damage Control activities Including Fire Safety. Keen to observe geopolitical developments and analyze them with his own opinion.

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