Muted election win for Modi may usher in new era for India’s oligarch class

<span>Rihanna, fourth from right, on stage with members of the Ambani family at a pre-wedding celebration for Anant (3rd left), the youngest son of Mukesh (left).</span><span>Photograph: Reliance Industries/Reuters</span>
Rihanna, fourth from right, on stage with members of the Ambani family at a pre-wedding celebration for Anant (3rd left), the youngest son of Mukesh (left).Photograph: Reliance Industries/Reuters

A few weeks before the election that weakened Narendra Modi’s grip on India, the rich, powerful and beautiful descended on his home state of Gujarat. The occasion was what one Indian writer described as “likely the most ostentatious pre-wedding ceremony the modern world has ever seen”.

In March, to celebrate the forthcoming marriage of Anant Ambani, the youngest son of Mukesh Ambani, India’s richest man, Mark Zuckerberg, Bill Gates and Ivanka Trump flew in. So did the entertainment: Rihanna and Akon. The airport near the venue was supposed to be reserved for India’s armed forces but the media reported that the authorities had granted special permission for non-military jets to land.

“When it comes to helping out his rich industrialist friends, prime minister Modi is willing to do anything,” Jairam Ramesh, a leading opposition politician, posted on X at the time.

After a decade in power that has, according to a recent study, left 40% of wealth in the hands of 1% of the population, the inequality that Modi’s favoured tycoons personify may help explain the shock loss of his majority in parliament this week.

Discontent has been apparent for years. When Modi tried to scrap price protections for small farmers in 2020, protesters burned effigies of him and of two moguls who have profited immensely under his rule, one of them being Ambani.

He presides over an industrial empire founded by his father that has made him a $110bn (£86.4bn) fortune, almost as large as those of the US tech barons who came to his son’s pre-wedding bash. Ambani’s rivals have claimed that Modi’s authorities helped his telecoms venture conquer the Indian market.

While the Ambanis have enjoyed cordial relations with the state under a succession of rulers, the protesters’ other flaming effigy represented a businessman whose rise has been entwined with that of Modi.

Gautam Adani stood by Modi when, as chief minister of Gujarat, he became a pariah after presiding over riots in which hundreds of Muslims were killed. When Modi became prime minister, propelled by his fierce Hindu nationalism, it was Adani’s private jet that bore him to New Delhi. Soon Adani was enjoying a slew of government infrastructure contracts. His fortune multiplied until he joined Ambani among the 20 richest people on the planet. Both of them lavish praise on the prime minister. Neither’s company replied to requests for comment.

Adani has said he is “nation building”. His admirers, like Ambani’s, draw comparisons with the chaebol business clans of South Korea, which enjoy privileges but drive economic development. Growth under Modi has been so fast that India has surpassed the UK as the fifth biggest economy.

But the proliferation of Indian billionaires does nothing for the millions of Indians barely subsisting. “There’s a lot of pain clouded by these huge top-line growth numbers,” said Sandipto Dasgupta, an expert on Indian politics at the New School for Social Research in New York.

A recent analysis by economists, including Thomas Piketty, argued that India under Modi is now more unequal than under British rule. “It is unclear how long such inequality levels can sustain without major social and political upheaval,” they wrote. Asked about the study, Modi replied: “Should everyone be poor?”

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Rahul Gandhi, who has led the opposition Indian National Congress party to a resurgence, made cronyism a line of attack. At the start of Modi’s rule, Gandhi called his regime a “suit-boot ki sarkar”, meaning a government for the well-heeled.

Such jibes bounced off the seemingly invincible Modi for years. But Gandhi stuck with them, referring frequently to Adani and Ambani. In May, Modi appeared to try to distance himself from the two tycoons, claiming they were giving “truckloads” of cash to his enemies.

“During the campaign, people said nobody cares about this,” said James Crabtree, the author of Billionaire Raj. “But maybe, actually, they did.” Defeats for Modi’s Bharatiya Janata party in Uttar Pradesh, India’s most populous state, appear to be the result of his Muslim-bashing failing to win votes from poorer Indians for whom no amount of nationalist rhetoric can mask a chronic lack of jobs.

If the stock market is any guide, the result bodes ill for the likes of Adani. When exit polls incorrectly predicted a thumping BJP victory, prices surged for “Modi stocks”, such as those in Adani’s companies. The real results sent them plummeting. At one point, Adani was worth $25bn less than he had been before the election.

For the first time, Modi will have to govern in coalition. That will mean handing ministries – and their budgets – to allies. The result, said Rohit Chandra, a political economist at the Indian Institute of Technology, will be a shift in who enjoys the state’s favour. “There will be different cronies from different regions. This is a welcome change.”