In April 2024, Elon Musk was scheduled to visit India to meet Prime Minister Narendra Modi and announce a multibillion-dollar Tesla factory investment. However, at the last moment, he canceled the trip and instead flew to China. This abrupt change of plans triggered a wave of critical headlines in the Indian media. Even before Musk’s rising influence in a potential second Donald Trump administration, this incident underscored his unique role as a key player in engaging with Asia’s emerging industrial giants.
Musk represents much of what India seeks in its relationship with the United States—significant investment, technological advancements, and now, a direct link to the White House. Conversely, India’s economic structure, where billionaire industrialists maintain close ties with political leaders, provides insight into a shifting U.S. economic landscape. Increasingly, tycoons like Musk serve not just as facilitators of industrial policy but also as intermediaries of political influence.
Over the past few decades, India’s political leadership and its business moguls have formed increasingly strong alliances. Prominent billionaires like Mukesh Ambani and Gautam Adani lead massive corporate empires with influence extending across nearly every sector of Indian life. Their business dominance has been highly profitable, with both ranking among Asia’s wealthiest individuals. As of mid-March, Ambani and Adani were listed on Forbes’ real-time billionaire rankings with net worths of $92 billion and $57 billion, respectively.
In this environment, accusations of crony capitalism—where business elites and political figures collaborate for mutual benefit—are common. The country’s main opposition leader, Rahul Gandhi, made this a focal point of his campaign in last year’s general election, which Modi won decisively.
However, the nature of government-business relationships in India has evolved since Modi’s rise to power in 2014. In The Billionaire Raj, I detail the period of the 2000s and early 2010s, which was marked by rampant corruption and cronyism. During this time, India had a weak yet personally upright prime minister, Manmohan Singh, who presided over what became known as the “season of scams.” The era was riddled with corruption scandals involving billions of dollars, with allegations spanning various sectors, including telecommunications, coal, and iron ore.
Even then, corruption in India was not a matter of simple bribes in envelopes or suitcases—it was far more sophisticated. Nonetheless, many viewed the situation as spiraling out of control. “Every cabinet minister was a sovereign enterprise,” an observer of Indian business once told me, only slightly exaggerating the extent to which political leaders were implicated in financial scandals.
Under Modi, this dynamic has changed. Like Singh, Modi is known for his personal integrity. Although corruption has not vanished, large-scale scandals have significantly declined. Today, few government ministers would risk embezzlement, fearing repercussions from India’s politically dominant prime minister.
India’s economic model is now increasingly resembling the structured crony capitalism seen in East and Southeast Asia in past decades. For example, Malaysia under Prime Minister Mahathir Mohamad in the 1980s and South Korea during President Park Chung-hee’s rule in the 1970s followed a similar pattern. These systems saw select business magnates forging close relationships with political leaders in exchange for constructing crucial infrastructure like airports, telecommunications networks, and buildings.
Under Modi, the role of India’s ultra-rich has become more strategically aligned with political objectives. Politicians collaborate with these billionaires because they can execute large-scale projects swiftly. If these business figures then receive financial or regulatory advantages in other areas as a result of their government connections—much like during India’s previous corruption scandals—that is seen as a justifiable compromise.
Musk’s role in Trump’s administration is unprecedented, spanning high-level politics, industrial policy, and even global diplomacy. No Indian industrialist enjoys Musk’s level of global recognition and influence. However, in a broader sense, the United States and India appear to be converging in their economic models. India’s crony capitalism has become more structured and efficient under Modi, while in the U.S., Trump’s administration is moving in the opposite direction. America’s historical system of open markets and fair competition is being replaced by one in which business leaders aligned with Trump receive special advantages. This shift marks a departure from a rules-based economic framework.
The long-term risks of this billionaire-politician nexus, despite its short-term benefits—such as increased investment and improved infrastructure—are substantial. One major concern is the potential for instability. Trump’s economic approach, which relies on deals with select business leaders, is fragile because it collapses if conflicts arise between him and his favored tycoons. An economic system dependent on seamless cooperation between industrialists and politicians is inherently vulnerable to disagreements and power struggles.
While billionaire entrepreneurs are often portrayed as independent visionaries in the public imagination—akin to characters from an Ayn Rand novel—the reality in autocratic-leaning states tells a different story. Across countries like India, China, and Russia, and increasingly in Trump’s America, business magnates function more as dependents than as power wielders. Despite their wealth, Adani and Ambani remain cautious in their dealings with Modi, much like Jack Ma in China with President Xi Jinping or Russian oligarchs with President Vladimir Putin. Even Musk has been noticeably deferential to Trump in recent interviews, seemingly aware that his privileged position is not guaranteed. Ultimately, in a system where industrialists and political leaders are closely linked, it is the politicians who hold real power.
India’s economic trajectory, however, does offer some reasons for optimism. While its initial phase of crony capitalism was marked by chaos and self-interest, it has gradually shifted toward a more streamlined and less overtly corrupt system. There is hope that a more rules-based economic order may eventually emerge.
Conversely, the United States appears to be moving toward a system rife with favoritism and financial misconduct. Under Trump and Musk, the nation is approaching what could be described as a new era of kleptocracy. The concern is that America’s own “season of scams” may not be far off.