Trump, Ambani, Musk Tango Under The Gaze Of Modi Govt

The Indian media remained strangely incurious about the United States’s secretary of state Marc Rubio’s visit to Reliance’s 1.4 million barrels per day (bpd) capacity Jamnagar refinery, singlehandedly built by Mukesh Ambani in late1990s. Mr Rubio did not visit the refinery out of curiosity and a sense of wonder, a state-of-art facility at the time when it was built. He held talks with the Reliance top brass headed by Mukesh. Why is a high representative of the apparently most powerful government in the world holding talks with a private entrepreneur, who is among the richest in India and in Asia? The intent of the meeting is very clear. Americans are looking out for refineries which can handle Venezuelan crude. US President Donald Trump had already mooted the idea that Mukesh Ambani should set up a refinery in America.

It may seem a little odd that the ostensibly most free market economy in the world like the US should be wooing a private player in India to set up shop in its territory. The details of the project are unclear. Mr Trump had announced on his social media platform Truth Social that it is a “$300 billion investment” but Reliance has not said a word about it. The US is keen that the Venezuelan heavy crude should be processed in the Reliance refinery, which it is already doing. Russian crude imports have reduced in recent months, and it is the Venezuelan crude that is the major input for the refinery. Mr Trump could be willing to raise funds at home for the Mukesh refinery because the US is not the friendly business place it was decades ago for Mukesh to set up a refinery in the US on his own. American markets are looking forward to an AI boom and they will not be interested in investing in the oil sector though oil is still the major energy resources, along with coal, for the global economy. Foreign investors like China may be willing to buy US securities but not set up business in the country.

There is an interesting twist in the whole story. In 2016 when Mukesh Ambani announced the launch of Jio, it marked the shift in Reliance’s focus from petroleum products to electronic communications through the mobile network. Then it seemed a considered change in direction at a time when the climate change compulsions were pushing the oil industry to a phasedown and a phaseout path. And it seemed a smart move away from the pre-climate change energy paradigm. It looks as though Mr Trump wants Mukesh Ambani to come back to his petroleum business roots. And Mukesh Ambani looks quite reluctant to shift back from the tertiary communications sphere to the secondary sector of dealing with an oil refinery operations. And it would appear that Mr Trump cannot find someone with the tested abilities of a Mukesh Ambani in the refinery business. Mr Trump has been an aggressive climate change denier, and he declared “drill baby, drill” to be his motto at the beginning of second term as President in January 2025. His abduction of the leftist Venezuelan president Nicolas Maduro and his Cilia Flores was a purely business-oriented raid. Mr Maduro was preventing American oil companies from exploiting the Venezuelan oil wells. Mr Trump has now made the way clear for American oil companies to operate the Venezuelan oil wells.

The other motive for Mr Trump to get Mukesh Ambani back to the oil refinery operations is to make way for his friend Elon Musk’s Starlink, which is finding it hard to get into the Indian market because of the domination of the Jio network. Mr Trump whose mind is absorbed in working out business deals, which is his deus ex machina to solve political crises, is thinking of a way to break Jio’s near monopoly of the Indian mobile network market. Mr Musk had already aired his grievance that the Indian government favours Jio, and that is what is preventing his Starlink from getting an entry into the Indian market.

It looks like that Mr Trump is hatching too many plans on too many fronts. At one level, he pushed back Mr Musk’s electric car Tesla’s tax rebate support, and he wants to compensate by creating an opportunity for Mr Musk’s Starlink in India. But he may find it difficult for Mr Trump to help Mr Musk in India. Mr Musk had failed to gain an entry for Tesla in India because he was demanding too many tax and other concessions. He might believe that his Starlink system which depends on low-orbit communication satellites to support mobile phone connectivity has some advantage over Jio in India. But the Indian government is not likely to hand over as it were the mobile network to Starlink.

Mr Rubio’s throwaway line about India becoming a “refinery superpower” is not going to flatter Mukesh Ambani with his earthy business instincts. Like in many other spheres, India by the sheer size of its economy, is fourth largest in refinery output, with China and the US standing close to each other in the first and second positions, and Russia occupying the third position. Of course, there is sense in the US seeking a supporting partner in the refinery sector because China is in many ways unpalatable to the US, especially Trump’s US. Despite Mr Trump’s impromptu diesel deal with Russian President Vladimir Putin, Russia is not the traditional friendly partner which India can be because India is counted as part of the free, democratic world. That India is a democracy does not matter much to President Trump. He is interested in the hard facts of business, and he is sure that he can do business with India, notwithstanding the glitches in the US-India trade agreement.

As things stand, it is a strange tango between Mr Trump and Mukesh Ambani, with Mr Musk a bystander with high stakes because he wants to enter the Indian market which would mean taking a slice of the Ambani-owned Jio market share. The Modi government is kept in the loop, but it seems to be a passive bystander. It will have a crucial role to play in obliging Mr Trump and the US in accommodating Musk’s Starlink in the hope that it can expand its footprint in the global refinery market and also diversify its sources of crude oil to include Venezuela. It is not a smooth terrain either for the Indian government or for Mukesh Ambani.