Indian industry sources said that a "U-turn" by the Kenyan government within a matter of hours wasn't normal, as they pointed out to statements by different statements by President William Ruto and the one made by Energy Minister Opiyo Wandayi earlier on Thursday.
According to Kenya's state broadcaster, Ruto told the Parliament that he had instructed the suspension of the procurement process for the expansion of Jomo Kenyatta International Airport (JKIA) and the recently concluded power transmission contract under the public-private partnership (PPP) model involving Kenya Electrical Transmission Company (KETRACO) and Adani Energy Solutions. Ruto said that he was taking the call to scrap the deals worth nearly $2.5 billion "based on the information provided to us by our partner nations", without naming any country.
Hours before Ruto's announcement, Kenya's Energy Minister Opiyo Wandayi was quoted as saying by Reuters that the Adani-KETRACO deal didn't involve any bribery or corruption.
Significantly, under Ruto, Kenya has emerged as one of the key sub-Saharan partners for the US, with the Biden administration designating the country as a "major non-NATO ally" in June.
Ruto's statement came in the wake of US Justice Department and Securities and Exchange Commission (SEC) indicted Gautam Adani, his nephew Sagar Adani and six other executives for paying bribes around $265 million to several Indian state authorities to win solar energy contracts expected to yield $2 billion over 20 years. The US prosecutors claimed jurisdiction over the matter on the ground that Adani companies raised around $175 million from US investors as well. The Adani Group has rejected the charges as "baseless" and stated that all "possible legal recourse will be sought".
Meanwhile, the Indian industry sources claimed that there was "widespread perception" in business circles that the US was playing a "double game" with India, at times favouring China over Indian interests in spite of its official position being otherwise.
"In the case of India, the US has been playing a double-game of sorts with India, wherein it sees us a strategic counterweight to China, while at the same time, targets our entities for its own geopolitical motives. A classic example is the case of Sri Lanka, where a US bank consortium is partnering with Adani to develop the West International Terminal (CWIT). In Africa, on the other hand, the Deep State, and in effect the US government, is working against Indian interests," industry sources explained. "The Deep State is a state within a state, which even wants the US government to toe its line. It is a strange situation, but unfortunately that's the case."
Further, they noted that the US Deep State, which wielded tremendous influence during the Clinton Administration, aided the economic rise of China, adding the US policy was officially reversed during the end of Obama administration and during the first Trump presidency, which dubbed India as a major partner in the Indo-Pacific.
"The US indictment against Adani appears to be a last-ditch effort by the current US administration, heavily influenced by the Deep State, to favor Chinese interests. Similar actions have been seen before, such as in the case of Elon Musk’s EV ventures, which were targeted because they posed competition to Chinese electric vehicle companies," they said.
They said that what Adani was doing in Africa was basically supporting the foreign policy objectives of the Indian government. In a speech to the Ugandan Parliament in 2018, PM Modi laid out India's new Africa policy, under which the continent would rank as a priority for New Delhi.
Industry sources stated that Adani's position of supporting Indian foreign policy objectives would remain the same, regardless of the party in power.