The Modi effect

Bangladesh has long been trying to woo major Indian companies to make investment in the country, but the efforts have been met with limited success to date.

At last, two behemoths -- Reliance Group and Adani Enterprises -- have forayed into Bangladesh to explore business opportunities.

Their close ties with India's business-friendly Prime Minister Narendra Modi have long been established.

To start off, Reliance Power and Adani Power yesterday signed separate deals with Bangladesh Power Development Board to potentially invest a combined $5.5 billion in the country to generate 4,600 megawatts of electricity.

One of the officials signing the agreements on behalf of the Indian companies expressed hope that the agreement is the beginning of the long-term electricity business in Bangladesh.  

Modi has been actively promoting his country's businesses abroad since taking over power a year ago. But his relationship with the two groups seems special, and it dates back more than a decade.  

When Modi ruled Gujarat as its chief minister, he was able to win support from Adani Group chief Gautam Adani and Mukesh Ambani, who controls Reliance Industries, India's most valuable company, as well as leverage the well-acknowledged business acumen of Gujaratis and a prosperous global diaspora to make the state wealthy.

Modi provided a platform for growth for companies in the state such as Adani Group, according to a report of Bloomberg published in May last year. Billionaire Gautam Adani is a native of Gujarat.

The 52-year-old has travelled with Modi in the past year more than any other billionaire, helping him emerge as the most prominent face of India Inc to the wider world. The Group saw its market value rise by nearly 50,000 crore rupee, with shares prices of Adani Enterprises reaching an all-time high in May.

Adani, despite all the criticism leveled against him, has a track record of executing projects within time, without any cost overrun, the Bloomberg report quoted an investment strategist as saying.

Although Indian media reported that Mukesh Ambani has fallen out with Modi, his younger brother Anil Ambani, who is the chairman of Reliance Power, is being promoted by the current Indian government.

He accompanied Modi to recent trips in France where Anil was eyeing on certain defence deals facilitated by the government in name of 'Make in India'.

In October last year, Anil was even one of the nine people Modi nominated from across India to take a broom and swept the ground at the Church Gate Station in Mumbai along with him under the prime minister's Clean India campaign.

Two years ago, a top business leader, who has strong business connection with India, told a group of reporters that he has been for years trying hard to court top business groups from the neighbouring countries to invest here. But after the changeover in India, everything seems to have changed.  

Local businesspeople and industrialists also looked at the deals on a positive note.

“The deals will give confidence to foreign investors to invest in power and infrastructure related projects in Bangladesh, which is essential to reach our desired growth trajectory,” said Asif Ibrahim, vice chairman of Newage Group of Industries.

He however added: “There is also a need for preferential market access of Bangladeshi products into Indian market, particularly our core export items to address the growing trade deficit between the two countries.”