Adani bribe-linked company in IPR tangle in US, could impact $10 bn American investment plan

The order comes at a time when India’s exports of solar products to the US are on the rise. This trend coincided with tariffs imposed by the Trump administration in 2018 on Chinese-made solar cells and panels, which created export opportunities for competitors, including India.

Official US trade data shows that prior to 2018, the US did not import solar panels from India. However, following the tariffs on Chinese solar products, American imports from India soared, reaching $2.3 billion last year. According to Reuters, in the second quarter of 2024, India accounted for 11 per cent of US panel imports, more than double its share in the previous quarter.

This is not the first time Indian solar panels have faced scrutiny in the US. Earlier this year, in August, Indian solar products were blocked. A trade attorney with Wiley Rein LLP told Reuters that the detention of Indian products was due to solar cells for Indian panels exported to the US being sourced from China. The US has expanded the scope of its scrutiny of solar items entering the country.

If Adani Green Energy is found to have violated Section 337, the USITC may issue an exclusion order to block the importation of infringing goods into the US. While a limited exclusion order would apply to products named in the case, a general exclusion order could block all infringing products. Notably, the Commission has the authority to refer the matter to the US Department of Justice (DOJ) for criminal investigation if fraud or other illegal activities are suspected.

The USITC order stated that the complaint was filed by the China-based photovoltaics company Trina Solar Co., Ltd., and Trina Solar US Manufacturing Module 1, LLC. “The matter is sub judice and is part of broader efforts in the US to scrutinise Adani businesses. However, as far as Section 337 of the US Tariff Act of 1930 is concerned, the US is trying to block solar product imports. Previously, Chinese exports were under scrutiny, and they were blocked. All of this is part of the US effort to promote domestic manufacturing,” said a person familiar with the development.

As part of a major push towards clean energy production in the US, the Inflation Reduction Act (IRA) was passed in August 2022. This Act directs nearly $400 billion in federal funding towards clean energy, aiming to significantly lower carbon emissions by 2030 and boost American competitiveness in the sector.

The latest case could impact Adani Green Energy’s aim to expand its US operations as part of the group’s $10 billion investment in American energy and infrastructure projects. The company is also central to efforts by India and the US to de-risk the renewable energy supply chain and reduce reliance on Chinese components and technology. In a social media post on 13 November, Gautam Adani, Chairman and Founder of the Adani Group had said: “As the partnership between India and the United States deepens, the Adani Group is committed to leveraging its global expertise and investing $10 billion in US energy security and resilient infrastructure projects, aiming to create up to 15,000 jobs.”

“The complaint alleges violations of Section 337 of the Tariff Act of 1930 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain TopCon solar cells, modules, panels, components thereof, and products containing the same. The complaint names the following as respondents: Runergy USA Inc. of Pleasanton, CA; Runergy Alabama Inc. of Huntsville, AL; Jiangsu Runergy New Energy Technology Co., Ltd. of China; Adani Solar USA Inc. of Irving, TX; and Adani Green Energy Ltd. of India,” the order stated.

On November 21, Adani Green Energy announced that it had decided to pause its proposed $600 million dollar-denominated bond issuance in light of recent bribery charges filed by US federal prosecutors against key Adani Group executives, including Gautam Adani. This followed criminal and civil cases brought by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) respectively against Gautam Adani, Sagar Adani, and Vneet S Jaain for their alleged roles in a $250 million bribery scheme to secure solar energy contracts in India.

US laws, particularly the Foreign Corrupt Practices Act (FCPA), prohibit certain individuals and entities from making payments to foreign government officials to obtain or retain business. Essentially, it is unlawful to offer, promise, or pay bribes to government officials in other countries.

A query emailed to the Adani Group remained unanswered at the time of publication.

In a statement, Adani Green Energy describes itself as India’s largest and one of the world’s leading renewable energy (RE) companies, with an operational portfolio exceeding 10,000 megawatts (MW). AGEL’s operational portfolio comprises 7,393 MW of solar, 1,401 MW of wind, and 2,140 MW of wind-solar hybrid capacity.