Elon Musk has recently posted on X claiming that “oligarchs” were obstructing Starlink’s entry into India, then asked whether Mukesh Ambani, chairman of Reliance Industries, was the “real boss of India”, and accused him of maintaining a “monopolistic chokehold” on the Indian public. Since beginning its licensing application process around 2021, Starlink has been unable to secure final authorization to operate in India. Starlink is far from the only company to encounter such obstacles. Similar risks have long been evident in other international cases. In 2007, British telecommunications giant Vodafone acquired assets in India and was subsequently hit with a massive tax demand. Even after India's Supreme Court ruled in 2012 that Vodafone was not liable for the tax, Parliament passed retrospective legislation to continue pursuing the claim. The legal dispute dragged on for more than a decade before finally being resolved through international arbitration in 2020. Another prominent case involved Foxconn. In 2022, the company announced a joint venture with India's Vedanta Group to build a semiconductor plant, only to withdraw from the project just one year later.
In recent years, numerous Chinese companies have faced similar difficulties when investing in India. In the consumer electronics sector, India's Enforcement Directorate froze approximately RMB 4.82 billion in Xiaomi's assets between 2022 and 2023 on the grounds of financial compliance violations. Vivo's bank accounts were repeatedly frozen, and its executives summoned for questioning. The company was eventually forced to relinquish part of its equity and bring in capital from an Indian domestic consortium in order to continue operating. In the electric vehicle and advanced manufacturing sectors, BYD and Great Wall Motor each proposed manufacturing investments in India worth around USD 1 billion, but both projects have remained stalled at the approval stage for an extended period. TikTok, owned by ByteDance, was once a hugely popular app in India, with more than 200 million monthly active users, but was eventually shut down by a direct government ban. A USD 216 million rail transit tender won by China Railway Rolling Stock Corporation (CRRC) was cancelled without explanation. Several Chinese photovoltaic and power companies continued to incur losses before deciding to withdraw from the market. In total, more than RMB 1 trillion in Chinese investment has suffered setbacks in India.
Musk's public criticism and the setbacks suffered by Chinese companies investing in India expose deeper structural problems in the country's efforts to attract foreign investment. For years, the Indian government under Prime Minister Narendra Modi has aggressively courted investors around the world under the banners of “Digital India” and “Make in India”, seemingly eager to invite every global technology giant to establish factories and manufacture equipment in the country. Yet many multinational companies have discovered, after entering the market, that advanced technology alone is not enough. Adhering to international norms is not enough either, and even bringing substantial financial resources to the table offers no guarantee of success. As soon as companies venture into strategic sectors such as telecommunications, energy and infrastructure, they find it virtually impossible to operate without taking the interests of deeply entrenched domestic conglomerates into considerations.
Seven established Indian conglomerates exercise control over much of the country's economic lifeblood. They dominate high-value sectors including telecommunications, energy, infrastructure, manufacturing and mining, while maintaining a deeply intertwined system of business and political interests with the government.
The first tier consists of three leading conglomerates with nationwide influence and the greatest leverage over policymaking. Reliance Industries operates across petrochemicals, energy, retail, telecommunications and satellite communications, making it a dominant force in India's digital economy. The Adani Group rose to prominence through its development opportunities in Gujarat and has established dominant positions in ports, airports, renewable energy, gas and media. It is a major domestic player supported by the Modi government. The Tata Group has deep roots in automobiles, steel, semiconductors, IT services and aviation, and is closely involved in India's advanced manufacturing and semiconductor localization strategies.
The second tier comprises four industry-specific conglomerates that dominate key niche markets. The Birla Group leads in cement, chemicals, and finance. Bharti Airtel, associated with the Mittal family, operates alongside Reliance Jio in the telecommunications sector and participates in shaping rules governing market access and spectrum allocation. The Mahindra Group is closely aligned with policies on agricultural modernization and automotive localization, giving it a strong position in agricultural machinery and the domestic passenger vehicle market. Vedanta is a major player in mining and semiconductors and has considerable influence over domestic mineral resource approvals.
To understand the considerable influence of Indian conglomerates, one needs to look at their relationship with the government. Families such as the Tatas and the Birlas maintained close ties with political figures during the independence movement. In 1944, they joined other industrialists in jointly proposing the Bombay Plan, which helped shape economic planning for post-independence India. After independence, India maintained a system of licensing under which government approval was required to establish factories, expand production or import goods. The established business families, already familiar with the bureaucracy and firmly entrenched in the system, were generally the ones best positioned to secure approvals. In effect, the regulatory system protected their interests. Dhirubhai Ambani, the founder of Reliance Industries, became well known during this licensing era for his ability to navigate the bureaucracy.
The economic reforms of 1991 abolished most industrial licensing requirements. However, scarce resources such as land, minerals, ports, energy and telecommunications spectrum remained dependent on government approvals and concessions, making them among the most lucrative areas of business. The expansion of the major conglomerates has largely focused on these sectors. They continued to grow in the years that followed. Tata expanded from salt and tea into steel, automobiles, aviation and IT, with annual revenue exceeding USD 100 billion. Reliance evolved from a petrochemicals business into a conglomerate spanning energy, retail and telecommunications. In 2016, Jio launched a price war with free data and low-cost packages, transforming India's telecommunications industry within just a few years. Adani expanded from ports and coal into energy and airports. In 2019, it secured operating rights for six airports in a single round of airport privatization tenders. According to compiled data, by the end of 2023, Tata had a market capitalization of approximately USD 249.1 billion, Reliance USD 193.9 billion and the Aditya Birla Group USD 62.5 billion, all several times higher than a decade earlier. Adani, meanwhile, briefly ranked among the world's wealthiest individuals in 2022.
This is not unique to India, but it is central to understanding the country's business and political landscape. The closer money gets to government approvals, the more important political influence becomes. The influence of Indian conglomerates over politics can broadly be divided into three channels.
The first is political donations. India's elections are among the most expensive in the world. Research by the Association for Democratic Reforms (ADR) into candidates' backgrounds has found a strong correlation between financial resources and the likelihood of winning elections. Beginning in 2017, the Bharatiya Janata Party (BJP) government amended relevant laws and introduced electoral bonds. Under the scheme, individuals and companies could donate unlimited amounts to political parties without disclosing their identities. The previous cap on corporate donations based on a company's profits was also abolished. In February 2024, the Supreme Court ruled the scheme unconstitutional on grounds including its infringement of voters' right to information. Data released subsequently showed that between April 2019 and January 2024, the BJP redeemed approximately INR 60.6 billion in electoral bonds, making it the largest beneficiary. The All India Trinamool Congress ranked second, with approximately INR 16.1 billion. According to data from the Election Commission, the largest donor was Hyderabad-based infrastructure company Megha Group, which contributed approximately INR 6.6 billion. Reliance-affiliated companies ranked second, with approximately INR 5.45 billion.
The second channel is personal networks and family diplomacy. The heads of India's major conglomerates maintain frequent contact with the prime ministers and state chief ministers, a well-established feature of the country's business and political circles. Family weddings, investment summits and business promotion events all provide opportunities to strengthen relationships and send signals. During Modi's tenure as chief minister of Gujarat, he began hosting the Vibrant Gujarat Global Investors Summit in 2003. Domestic business giants such as Adani and Ambani became regular participants. Adani and Modi both hail from Gujarat and are frequently mentioned together. Photographs of Modi travelling to Delhi aboard an Adani Group aircraft after winning the 2014 general election were widely circulated.
The third channel is more subtle, and it is all about embedding corporate business objectives within the national development agenda. The Modi government emphasizes infrastructure development, domestic manufacturing, digitalization and the energy transition. The core businesses of the major conglomerates correspond closely to these priorities. Tata has deep interests in steel, automobiles and manufacturing and has taken a leading role in approved semiconductor projects, with plans to build a wafer fabrication plant in Gujarat and an assembly and testing plant in Assam. Reliance has extensive operations in energy, chemicals and digital services and has invested heavily in new energy in recent years. Adani, the fastest-growing of the three, is already one of India's largest private port and airport operators and holds significant positions in coal and renewable energy. Since 2020, the government has introduced production-linked incentive (PLI) schemes to promote manufacturing. The companies best positioned to secure substantial subsidies and rapidly expand production are often these major domestic conglomerates.
From Starlink's difficulties in entering the Indian market to the repeated setbacks experienced by Chinese companies, these cases offer a snapshot of the structural risks facing foreign investors in India. They also reveal the considerable influence of domestic conglomerates and carry important strategic implications. First, they challenge misconceptions about the Indian market. India does not have a fully liberalized market environment. Its core industries operate in a market where domestic conglomerates play a dominant role in shaping the rules, and international business practices may not necessarily apply. Second, the central risks of investing in India do not lie in technology or costs, but in unpredictable administrative discretion and barriers protecting the interests of domestic conglomerates. Third, in sectors such as advanced manufacturing, the digital economy, energy and infrastructure, the protectionist position of domestic conglomerates is likely to remain a long-term feature of the market. Policy benefits tend to flow first to domestic giants whose businesses align with India's national development agenda.
India's growth potential deserves attention, but Chinese companies seeking to capture a share of that opportunity must first assess whether they have the resources and leverage to engage in prolonged competition with domestic conglomerates. India has never lacked market opportunities. What it lacks is a business environment in which companies can rely on stable rules. Companies entering the market must be prepared to adapt to changing regulations and engage with those who shape them over the long term. Rather than hoping for a relaxation of government policies, they should assess before entering whether they can withstand approval processes that may drag on for years, competition within territories controlled by domestic giants, and rules of the game that can change at any time. Such clear-eyed preparation is often more important than technological advantages themselves.
Most importantly, companies must understand that entering the Indian market on a large scale is to undertake the task of reforming Indian society, a responsibility far beyond the capacity of an ordinary commercial enterprise. Even partnerships are not a viable solution, because India's established business culture operates on the principle that “what is mine is mine, and what is yours is mine too”, leaving virtually no room for compromise. By contrast, small and medium-sized enterprises and microbusinesses may actually have opportunities in India, despite the risks they face, which are simply of a different nature.
Final analysis conclusion:
From Starlink's difficulties in securing market access to the repeated setbacks experienced by Chinese companies, these cases reveal the deep influence of domestic conglomerates behind India's efforts to attract foreign investment. As it stands, seven major domestic conglomerates exercise control over key sectors such as telecommunications, energy and infrastructure. These conglomerates have developed a deeply intertwined system of mutual dependence with the government, influencing policymaking through political donations, business and political networks, and the alignment of their commercial interests with the national development agenda. Chinese companies investing in India must therefore recognize that the country does not operate as a modern free-market economy and must be prepared to confront the influence of these domestic conglomerates.
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Xia Ri is an Industry Researcher at ANBOUND, an independent think tank.
