Washington Post Reports Modi Govt Pressured LIC To Fund Adani Group; “Decisions After Due Diligence,” Says Insurer
A fresh controversy has erupted in New Delhi following an explosive report by The Washington Post on Friday alleging that the government of Prime Minister Narendra Modi pressured nation insurer Life Insurance Corporation of India (LIC) to channel billions of dollars into Adani Group companies. The investigation claims the move was part of a concerted effort by Indian officials to prop up the indebted conglomerate of Gautam Adani, one of the country’s most politically connected business figures whose meteoric rise happened simultaniously with the political ascent of PM Modi.
According to the Post, internal documents from the Department of Financial Services (DFS), a branch of India’s Finance Ministry, revealed how officials coordinated with LIC and the government’s think tank, NITI Aayog, to push through a proposal worth roughly 3.9 billion dollars (about Rs 33,000 crore). The documents described the initiative as aimed at “signalling confidence in the Adani Group” and “encouraging participation from other investors” at a time when major Western banks were reluctant to lend to the conglomerate.
The report details that the plan came to fruition in May this year when LIC financed an entire 585 million USD bond issue for Adani’s ports subsidiary — a development critics said amounted to the misuse of public funds. The alleged plan, The Washington Post wrote, illustrates Adani’s “clout within the Modi government” and the belief among officials that his empire is critical to India’s economic growth story.
Government departments, the Prime Minister’s Office, and NITI Aayog did not comment on the allegations when they were contacted for the response, the report said. The Adani Group, however, strongly rejected any suggestion of political influence, calling the claims “misleading and unfounded.” It maintained that LIC had earned substantial returns from its investments and that its relationship with India’s state insurer was commercially driven.
“Assertions of undue political favour are unfounded,” the group told The Washington Post. “Our growth predates Mr Modi’s national leadership.”
The report further highlighted that the alleged investment plan was developed against the backdrop of the Adani Group’s legal and financial troubles abroad, including a 2024 indictment in the United States on charges of bribery and securities fraud. While Adani has described those charges as “baseless,” the investigations prompted questions about the company’s governance and its heavy debt load.
In a strongly worded rebuttal issued on Saturday, the Life Insurance Corporation of India dismissed the Washington Post report as “false, baseless, and far from the truth.” The insurer insisted its investment decisions were made independently, in line with its board-approved policies, and after rigorous due diligence.
“No such document or plan as alleged in the article has ever been prepared by LIC,” the statement said. “All investment decisions are undertaken in compliance with extant policies, provisions in the Acts, and regulatory guidelines in the best interest of all stakeholders.”
LIC emphasised that neither the Department of Financial Services nor any other government body had any role in its investment decisions, criticising the article for attempting to “tarnish the reputation” of both the institution and India’s financial sector.
Officials familiar with LIC’s operations have long maintained that its portfolio is diversified across multiple sectors and that its exposure to Adani entities remains within permissible limits. The corporation also pointed to the recovery of its Adani-related investment values since the market shock following the Hindenburg report in 2023.
The opposition Congress party seized on the revelations, describing them as “deeply disturbing” and alleging a systematic misuse of public savings. In a statement issued by party general secretary Jairam Ramesh, the Congress accused the “Modani partnership” — a term the party uses to describe the Modi-Adani relationship — of turning LIC into a “bailout vehicle” for a private conglomerate facing criminal allegations abroad.
“Under whose pressure did officials of the Ministry of Finance and NITI Aayog decide that their job was to bail out a private company?” Ramesh asked. “Is this not a textbook case of mobile phone banking?”
He alleged that the decision endangered the savings of LIC’s 30 crore policyholders and recalled that the insurer had previously lost nearly Rs 7,850 crore in just four hours of trading in 2024 following Adani’s indictment in the United States. Congress also reiterated its long-standing demand for a Joint Parliamentary Committee to investigate the “Modani MegaScam,” which the party says involves manipulation of regulatory agencies, over-invoiced coal imports, and “rigged” privatisation of national assets.
“The Public Accounts Committee should begin by enquiring how LIC was forced to invest in Adani Group firms,” Ramesh said, arguing that such scrutiny would fall well within Parliament’s oversight powers.
