Modi govt orchestrated $3.9b LIC bailout plan to support Adani Group: Report

The Narendra Modi government reportedly devised a covert plan to channel billions of dollars from the Life Insurance Corporation of India (LIC) into the debt-laden Adani Group, according to a Washington Post investigation cited by The Wire.

The report reveals that in May 2025, India's Union Finance Ministry, its Department of Financial Services (DFS), the state-owned LIC, and the government think tank NITI Aayog jointly developed a $3.9 billion investment strategy to prop up Gautam Adani's business empire. The move came as several foreign banks in the US and Europe hesitated to extend further credit to the conglomerate following corruption and fraud allegations.

Documents accessed by The Post show that the plan materialised when Adani Ports issued a $585-million bond to refinance existing debt. 

"The plan came to fruition the same month that Adani's ports subsidiary needed to raise roughly $585 million in a bond issue to refinance existing debt. On May 30, Adani Group announced that the whole bond had been financed by a single investor — LIC — in a deal immediately decried by critics as a misuse of public funds," the report said.

According to The Wire's coverage of the findings, the proposal's stated aim was to "signal confidence" in Adani and attract additional investors, even as the group's debt surged by 20% in the past year and it faced ongoing investigations by US authorities. The US Department of Justice and Securities and Exchange

Commission (SEC) has charged Adani and his associates with a multibillion-dollar bribery and fraud scheme involving false statements and $250 million in illegal payments to secure energy contracts. Adani has denied the allegations, calling them "baseless."

In October, the SEC stated that Indian authorities had failed to act on its requests to serve legal summons and complaints to Adani Group executives.

The Post report also recalls that a 2023 exposé by US short-seller Hindenburg Research accused Adani of stock manipulation and accounting irregularities. While India's market regulator SEBI dismissed two of Hindenburg's allegations in September this year, the fallout prompted many global banks to distance themselves from the conglomerate.

Citing internal DFS documents, the investigation found that Indian officials described Adani as a "visionary entrepreneur," with his ventures across ports, power, and infrastructure viewed as "critical to national economic goals." 

However, analysts interviewed by The Post warned that LIC — which safeguards the savings of millions of low-income Indians — is exposed to significant financial risk through such concentrated investments.

"It seemed abnormal for LIC to invest such large sums of money in a private corporate entity," independent analyst Hemindra Hazari said. "If anything happens to LIC … it's only the government that can bail it out."

Opposition leaders have long pointed to Modi's close relationship with Gautam Adani as evidence of crony capitalism. The Adani Group has dismissed such claims as a "conspiracy against India."

According to the Washington Post, many observers see the bailout as another example of India's tightening corporate-state nexus — where Adani's success is increasingly intertwined with the government's economic ambitions, and taxpayers ultimately bear the financial burden of sustaining one of Modi's closest allies.

Trinamool Congress MP Mahua Moitra, in a series of posts on X (formerly Twitter), lashed out at the Modi government, saying: "All patriots out there & all media houses — how about some attention & coverage on how ₹30,000 crores of Indian tax payer money used as Adani's piggybank courtesy @FinMinIndia? ... Modi government keeps funding @gautam_adani & the Indian people have to keep bailing him out."

Meanwhile, the Adani Group, in its response to The Washington Post, "categorically denied" having any role in the government's decision, terming the claims of political favouritism "unfounded" and asserting that its growth "predates Modi's national leadership."

The Post also reported that Ravi Nair, the independent journalist who co-authored the investigation, is currently facing a defamation suit filed by the Adani Group for a previous story published in Frontline magazine and related interviews.