India under Economic Warfare #374

Hindenburg Report on Adani was a camouflage. The real story is unfolding after that. The Economic Warfare being unleashed on India needs to be fully understood. An extremely in-depth analysis!

India under Economic Warfare #374
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If it's... possible to start a war in a computer room or a stock exchange that will send an enemy country to its doom, then is there non-battlespace anywhere? ... If [a] young lad setting out with his orders should ask today, "Where is the battlefield?" the answer should be, "Everywhere." - Colonel Qiao Liang and Colonel Wang Xiangsui People's Liberation Army, China 1999

In the book "Art of War", Sun Tzu talks about warfare strategies.

Therefore, the best warfare strategy is to attack the enemy's plans, next is to attack alliances, next is to attack the army, and the worst is to attack a walled city.

In a world where battlefields are ubiquitous, it is important for one, who is trying to change his orbit and trajectory, to realize that the current constellations of powers in the global galaxy will not accept this change. A change that could disrupt their calculations.

That is why the first thing to protect is one's plans, then alliances, and then one's armed forces. The last part - the country will be fine if all these are secure.

The Petulant Indians - a lesson in colonial disdain

We discussed a rag in our last newsletter that was an embarrassment for someone who has done his education in Finance and Accounting.

Hindenburg’s Adani Stunt: Embarrassing and Amateurish #373
Hindenburg Report on Adani Group has created a splash and stocks have lost value. Is it credible? What can one make out of it? A detailed look!

A report that could have only worked amongst old gossipy women - a "kitty party" rag in Delhi Punjabi lingo - from a short seller Hindenburg Research, if you want to call that trash "research", started off a bloodbath on Indian stock exchanges for the Adani stocks.

This is what happened to the Adani group stocks. $107Bn wipeout. From a high of Rs 4190 to a low of Rs 1017.45.

Source: Chartr

Sometimes, the kind of direction your adversary's writings take shows what may be the real game behind what is happening.

To see that, we should look at the Freudian reaction of the Anti-India and Hinduphobic New York Times. Why do we say so? Because the colonial and imperial mindset of the New York Times has patronizingly defined India as "pious," "craving," "petulant," "intransigent," and "believes that the world's rules don't apply to it".

Source: Indophobia: The Real Elephant in the Living Room / Huffington Post

And, as has been the wont of this India and Hindu hating publication, the article on Gautam Adani and the impact of Hindenburg was no different.

Pissed off that the Indian government, after assuming the G-20 Presidency, had dared to call itself “the Mother of Democracy” (actually, "billing itself") the New York Times goes about dissing Indian establishment and everyone linked to it!

Hardly disguising its glee at how the fall of the Adani group, which is in lockstep with India's growth, will translate into a painful future for Modi's India, New York Times also brought in the Gujarat 2002 riots while discussing Adani and Hindenburg.

Source: New York Times

The question one is left with after reading that article is - Why is New York Times so obsessed with Modi when the article was really about Adani?

Why Adani is so important to India?

And it is not hard to imagine why someone who is after Adani would be so obsessed with Modi and his Indian dreams. Adani, after all, has been the key to growing Indian infrastructure.

It is hard to overstate how much the group resembles a modern day industrial empire. Adani runs India’s largest ports, operates ~20% of its power-transmission lines, warehouses 30% of the country’s grain, accommodates ~25% of its commercial air traffic, and produces about 20% of its cement. (Source: Password Pirates / Chartr)

A company that has hard assets in terms of how:

  • its warehouses and silos (for Food Corporation of India) store India's grains, its trains distributed it to 6 million Indian citizens under Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) (Source: Adani Agri Logistics dispatches 30,000 tonnes of food grains for PMGKAY / Yahoo Finance)
  • it modernized and operates seven Indian airports like Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram. Just Mumbai airport has around 30 million passengers flying in and out of it!
  • in a $26 Billion Indian Cements industry in 2022, Adani companies own roughly 19% market share (Source: India Cement Industry Market Share 2022 (Listed Companies) / Tradebrains)
  • it is India’s largest private train operator with 66 freight trains (42 Container trains, 16 Bulk trains, 7 Agri trains through wholly owned subsidiary Adani Agri Logistics Limited and 2 Auto trains in JV with NYK Auto Logistics (Source: Adani Logistics)

and that has not defaulted ever, was being brought down for "information" that the market had already factored in, in the last 10 years, is being dinged as if it is a fly-by-night operator!

But even more than that, what is the one thing that strikes you?

A substantial percentage of Adani's cashflows are linked to India's sovereign payments. He is not getting as much money from private customers. He's being paid by the Indian government for most of his businesses. So, a substantial inflow is guaranteed as long as India's economic power to pay is guaranteed.

Further, when we talk of Debt to EBITDA (Earnings before Interest, Tax, Depreciation and Amortization), as a measure of leverage of a company, one must compare Adani's Debt/EBITDA with the other infrastructure companies.

“Following recent concerns, Adani Group has shared details of debit & leverage levels. Consolidated debt is at ₹1.6 tn (ex shareholder sub-debt) & Debt/Ebitda is down from 4.3x in FY16 to 3.2x in FY22. Acquisition of cement business may add c. ₹600 bn to debt, but also lift cashflow. Diversification of borrowing-mix, has cut share of Indian banks to 33% of debt & 0.5% of sector loans; rest with bonds/foreign banks. We watch for progress, but see low risks for banks," the note stated. (Source: What Jefferies says on Indian banks exposure to Adani Group / Live Mint)

We are talking about a ratio of 3.2x in FY22.

This is what Adani group shared in December 2022 as well.

Asia's richest man said Adani Group's debt-to-EBITDA ratio has come down from 7.6 to 3.2, which is "very healthy". The debt-to-EBITDA ratio is a debt ratio that shows how many years it would take for a company to pay back its debt if net debt and EBITDA are held constant. (Source: 'Very healthy': Gautam Adani says debt-to-EBITDA ratio has come down from 7.6 to 3.2 / Business Today)

Now let's take a look at companies in the same/similar space and their leverage levels.

Source: Data collated from Gurufocus

7.6 Debt to EBITDA may have been a bit higher, but even that was reduced to 3.2. Compared to the levels that other large infrastructure companies have, that is certainly not over-leveraged!

Specificsally when such a large proportion of earnings are guaranteed by a sovereign - India.

Is infrastructure bet by a nation at the scale that India is now pursuing (and China did in the 90s), a gamble?

The Development Bargain - games elites play

Stefan Dercon, Belgian-British economist and a Professor of Economic Policy at the Blavatnik School of Government and the Department of Economics at the University of Oxford, calls it the Development bargain. He wrote a book titled "Gambling on Development."

Gambling on Development
In the last thirty years, the developing world has unde…

He argues that the key for countries to win in the new world (versus losing the bargain) is not in a set of policies but a development bargain where a country’s elites shift from protecting their own positions to gambling on a growth-based future.

China made that bargain. So did countries like Bangladesh, Ghana, and Ethiopia per his studies.

If you are up for some educational discussion on his book and insights, here is one video to watch.

So, infrastructure is the key to a country's central push for winning economic battles.

More importantly, it is a bargain. A gamble. That the Elite put on the country's development as opposed to their own personal interests.

They realize that the country's development is in their interest.

And, this is where what Adani Group said in its reply about his company and India's national interest is of paramount importance.

“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” Adani said in its response. (Source: Deccan Herald)

When we look at the obviously engineered sell-off on the stock exchanges of the Adani stock, one is forced to ask the question.

Who amongst the elites are against this 'development bargain'?

So when you see the left-liberal, the opposition, the traditional power centers outside India in Europe, China, and the US getting all excited and patronizing (as New York Times did) - you start to wonder.

Are the elites against India's Development Bargain, a sold-out crowd of sepoys?

For that, let us look at their track record.

But, this is not the first time that India's economy has been sabotaged.

How a Violent Church and its 'Protests' have sabotaged Indian national interests

Before we go ahead with this set of case studies, let us look at insights from a year-long study conducted by Mother Jones magazine on the relationship between the CIA and the Vatican. Why it is so important.

Source: Church and State

One thing that this Mother Jones study suggests is how the Churches and their priests act as information-gathering extensions that are used for intelligence operations not just by the Vatican but also by intelligence agencies like the CIA.

To understand that, please check out the Joshua Project.

Source: About Joshua Project

When you check the page on India, it will shock you in terms of the level of information that it shares. Remember, this is just the public information. What may have been gathered would be far more.

Source: India page of Joshua Project.

With this background, let us get into our case studies.

Vedanta's Sterlite Copper Mines sabotage and India's Economic hit

Here is the answer from Piyush Goyal in Rajya Sabha on February 7th, 2020 to a question from Majeed Memon.

Source: Government of India, Rajya Sabha Unstarred Question

India was among the top five exporters of copper cathodes in 2017-18 and by 2018-19, it had become a net importer.

(Source: How shutting down of 1 plant turned India from copper exporter to importer in under 2 years / ThePrint)

Vedanta Limited’s copper plant at Tuticorin accounted for a 40% share of India's annual copper production of 1 million tons. (Source: Indian Express)

Then in July 2017, things escalated to a whole new level.

Major protests followed after alleged gas leaks in 1997 and 2013, while in July 2017, thousands formed a human chain to protest against a proposed second plant. Then, in January 2018, two labourers from Kumareddiyapuram village who worked for Sterlite told their neighbours that they had noticed hectic activity for a second plant nearby. With the support of local Thoothukudi-based activists, a group of villagers went to meet the district collector in search of answers. Dissatisfied, they organised a one-day hunger strike on 12 February at VVD Junction in the main city. Fatima Babu, a local activist who had once contested an assembly election as a candidate of Vaiko’s MDMK, has been at the forefront of the villagers’ protest. (Source: How a small protest in Thoothukudi turned into an explosive cocktail / ThePrint)

In March and April 2018, mass protests were organized against Vedanta's plans of setting up a second smelting facility and closing all the smelting plants.

On May 22nd, 20,000 aggressive and violent protesters created mayhem which led to a police lathi charge and shooting. 14 people were killed and many were injured.

On May 28, 2018, the Tamil Nadu Government ordered the permanent closure of Vedanta's Sterlite plant in Tuticorin.

Sterlite Copper Plant Shutdown: Tamil Nadu government orders permanent closure of Sterlite plant in Tuticorin
Violence on May 22 against the Sterlite plant led to the death of 12 people and the next day another youth succumbed to injuries sustained in police firing.

What was incredibly interesting is that Catholic Church was rejoicing at the news of India's Copper plant closure!

Source: Union of Catholic Asian News

What the heck does the Catholic Chuch have to do with a copper plant in Kerala?

Interestingly, one of the Catholic priests had been injured in the police action while he was leading the protests in Tamil Nadu that day. Father Leo Jeyseelan. (Source: Deccan Chronicle)

So much skin in the game for the Catholic Church?

Violent Church targeted Adani port

The same Catholic Church attacked police, media, and public property during their protests against Adani's port at Vizhinjam port.

The attack by Catholic Church led by the Archdiocese Archbishop was severe and violent!

Source: Vizhinjam protest clash: Thomas J Netto prime accused, 50 bishops from Latin archdiocese charged, Vizhinjam protest, Vizhinjam port / Mathrubhumi

The target in this case was also Adani's company.

Vizhinjam port is no ordinary undertaking for India. As a transshipment hub, it is a clear competition to Colombo, Singapore, and Dubai.

Source: Project Information Memorandum

Just this last week, Feb 3rd, 2023, the Kerala State government is planning large investments of Rs 60,000 crores near the Vizhinjam port becuase of what this one port promises to bring to that state and country as a whole.

The state government is planning massive development projects for the Vizhinjam harbour project, along the lines of key ports across the world, Finance Minister KN Balagopal said. Presenting the State budget on Friday, the government stated that it is planning various projects including land pooling and public private partnerships in Phase 1 of the Vizhinjam project. This is estimated to cost Rs 60,000 crore over the years. “The Vizhinjam Sea Port can be developed into the biggest transshipment harbour in the world. It is strategically placed on one of the busiest sea routes in the world,” the minister said. (Kerala Budget: Govt mulls massive developments projects linked to Vizhinjam port, Rs 321 cr for fisheries / Onmanorama)

Do you see an interesting pattern going on here?

Economic warfare and sabotage of a country that is trying to get out of poverty and onto the global stage while 'billing itself as the "Mother of Democracy"?'

What sense do you get?

That economic warfare and sabotage is about the power to control everyone on the global chess board so the moves that some powers play are unbridled and unhindered.

Kolkata Bears

Sabotage via the bourses in the case of Adani was not the first such instance. Its history is long and instructive.

In October 1977, Reliance Industries Limited, then India's largest private company was coming out with its first IPO of 2.8 million equity shares at Rs 10 each!

The company raised some more money via convertible debentures. The share price of Reliance went up to Rs 186 by 1982. In 1982, Reliance was coming out with a rights issue of partly convertible debentures.

That is when the bear operators' cartel in Kolkata started short-selling Reliance Stocks. On March 18, the bears had brought the price down to Rs 121.

It was then that Dhirubhai Ambani stepped up to take the battle against the Kolkata bear cartel and gave them a drubbing that they would remember. He made the bear cartel pay for their attack many times over.

Source: How Dhirubhai Ambani turned the tables on the Kolkata bear cartel / Economic Times

So when Hindenburg's "Research" stunt mentioned Mahua Moitra, an extreme anti-Modi Indian politician from Kolkata, one sat wondering.

Of course, Gautam Adani is no Dhirubhai Ambani and the Indian bourses are not what they used to be - isolated from the world versus connected with the global financial markets. But make no mistake, Adani's counter will have the stamp of India's sovereign interest clearly marked.

For, the attack on Adani, as the New York Times' boisterous article inadvertently and obliquely alluded to in its innuendos, and what Adani's reply said specifically - is an attack on India and Modi's dream of India.

And nothing can underscore this better than the support that has come Adani's way post the attack on his group.

First was the Israeli Prime Minister, Netanyahu. A close friend of Narendra Modi and India's close ally. He backed Adani profusely on the occasion of an event marking the Adani takeover of the Haifa port.

Source: Bloomberg

And the next one was Egyptian President El-Sisi's (Chief guest in India's 2023 Republic Day) backing of Adani and even the offer to use Egypt's Sovereign Fund to help support the group!

Source: Egypt Today

If you had any confusion about what Adani means to India's future plans in the eyes of India's (and Modi's) adversaries, allies, and Modi - then these two incidents should clear those doubts.

Now, let us better understand the mechanics of Economic warfare and sabotage.

Economic Warfare and Dominance post Cold War

Beyond the rhetoric of geopolitics, democracy, globalization, and all the rest of that crap, there is a game being played. After the end of the Cold War, the West (led by the US) found itself in an invincible position. And, that entailed the project of global dominance that had not been seen until then.

Francis Fukuyama had kind of argued that though using a different tactic in his book "The End of History and the Last Man," as well. But the economic warfare of the 1990s and 2000s has been predicated on this sense of confidence laced with a strong feeling of bravado in the geopolitical space.

But if at the beginning of the 90s, the geopolitical argument collapsed, the economic discourse remains in all its purity. In the same year, Secretary of State Warren Christopher officially declared that “economic security” was to be elevated to the top foreign policy priority of the United States of America. In other words, the winners of the Cold War have officially declared economic war on the rest of the world. The perspective is certainly largely liberal; everyone has their chances and can win this game, but the discourse is ambiguous because it is tinged with the defense of national interests. In the end, it mixes both liberal and mercantilist rhetoric, principles hardly compatible in the eyes of economists but perfectly legitimate for politicians. In order for a country to be fit to fight in economic warfare, it needs a state, that is – Esambert would say – a resolute warlord, who knows the profession of arms and who reduces the morale and spirit of conquest to the economy. (Source: "The role of economic warfare in understanding contemporary geopolitics" /

In his book, "The Death of Money", James Rickards shares how financial warfare as a legitimate war zone was the obsession within Pentagon.

Source: The Death of Money

Now, Economic or Financial warfare has a legitimate tinge around it. Sabotage may reduce that to terrorism. And that brings us to the question of what is Economic terrorism.

Source: Roundtable on Economic Terrorism

Let's just reread it again about economic terrorism:

...varied, coordinated and sophisticated or massive destabilizing actions in order to disrupt the economic and financial stability of a state, a group of states or a society for ideological or religious motives.

They missed one thing - political motives.

More importantly, the real crux is when economic terrorism is an extension of economic warfare.

State and the Non-state Actors of Economic Warfare and Sabotage

In fact, these days as players like George Soros with NGOs and extra-official organizations work to undermine and sabotage various economies, they also happen to be an extension of state establishments. The Clinton/Obama/Biden Democrat establishments have elevated Soros in the matters of state and now over the years, he happens to help shape the US foreign policy.

“People in government used to sort of dismiss George—this crazy guy interested in Hungary,” said Morton Abramowitz, the former United States Ambassador to Turkey, who is now the president of the Carnegie Endowment for International Peace, and has participated in a Soros-funded advocacy group on the Balkans. “He’s now become a player—but it’s very recent, a new phenomenon.” Abramowitz went on, “He’s untrained, idiosyncratic—he gets in there and does it, and he has no patience with government. As I frequently say about George, he’s the only man in the U.S. who has his own foreign policy—and can implement it.” When I told Strobe Talbott, the Deputy Secretary of State, about Abramowitz’s remark, Talbott, referring to Soros’s foreign policy, responded, “I would say that it is not identical to the foreign policy of the U.S. government—but it’s compatible with it. It’s like working with a friendly, allied, independent entity, if not a government. We try to synchronize our approach to the former Communist countries with Germany, France, Great Britain—and with George Soros,” he added with a grin. (Source: The World According to George Soros, by Connie Bruck/The New Yorker)

The American establishment had created an entire operation to "engineer democracy" in the ex-Soviet countries. The use of color revolutions through what is euphemistically called "civil obedience", regime changes were made.

Source: US campaign behind the turmoil in Kiev / TheGuardian

So you see, Soros' International Renaissance Foundation was involved in the funding and orchestrating of the Orange Revolution in Ukraine along with the US sabotage agencies like USAID and components of the National Endowment for Democracy like the National Democratic Institute for International Affairs (NDI) and International Republican Institute (IRI).

See this article for a full understanding of NED, its components and what is the real nature of USAID.

Drishtikone Newsletter #354: How US Media helps America Wage Wars Globally
Waging Wars - Covert and Overt - by the United States has a formula. Media backs the establishment in planning and execution. A detailed analysis of the various mechanisms and players

When Ukrainian law enforcement tried to probe the organization funded by the Obama administration and George Soros, the American Embassy put pressure on Ukrainian agencies to stop the probe!

It turns out the group that Ukrainian law enforcement was probing was co-funded by the Obama administration and liberal mega-donor George Soros. And it was collaborating with the FBI agents investigating then-Trump campaign manager Paul Manafort’s business activities with pro-Russian figures in Ukraine. The implied message to Ukraine’s prosecutors was clear: Don’t target AntAC in the middle of an America presidential election in which Soros was backing Hillary Clinton to succeed another Soros favorite, Barack Obama, Ukrainian officials said. “We ran right into a buzzsaw and we got bloodied,” a senior Ukrainian official told me. (Source: US Embassy pressed Ukraine to drop probe of George Soros group during 2016 election / TheHill)

And Soros has been intervening in Ukraine since.

(Source; "Final Performance Evaluation of the Ukraine National Initiatives to Enhance Reforms (UNITER)" / USAID)

It is not an innocent bystander or an altruistic force. That was very clear from his pounding of the British Pound and attack on the Bank of England.

So, the question one needs to pose is - are state establishments unleashing economic terrorism by using non-state actors as their extension? And even when the actions and interventions are so blatant, as it has been in Ukraine, there is a fig leaf of plausible deniability.

A fig leaf that won't even fool a third grader somehow foxes the entire global establishment. Either because they are dense. Or because they are collaborators and even a flimsy excuse is elevated to the level of great credibility.

Everywhere battlefield?

Go back and re-read the quote we started our newsletter today with.

"Where is the battlefield?" ..... "Everywhere."

If we look at this chart, we will see how many geopolitical upheavals have shaped global trade.

Source: Geopolitics is the biggest threat to globalisation / Financial times

The idea and the fetish for control are neither innocuous nor inadvertent.

They are part of the global battles being fought every day. Between states, non-state actors, terrorists, NGOs, activists, and religious organizations.

Who wins these battles will depend on the ability to be daring, aggressive, and willing to use a plethora of tools and vehicles (organizations) with an ability to make it look like happenstance.

Is Modi's establishment there yet?

Video Corner: The Quantum Band-wagon

Quantum this, quantum that is what everything is these days. From Quantum Computing to Quantum Internet to Quantum Metrology (no not Metereology but the science of measuring), this buzz word is everywhere.

Everyone from HP to Google to IBM has dumped millions into Quantum Computing with little to show for those investments.

Sabine Hossenfelder has a PhD in physics and she shares interesting insights into the buzzworld of Quantum! Funny and informative!

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