Mukesh Ambani and Narendra Modi drifting apart
Mukesh Ambani has done the unthinkable: he’s snubbed his old friend Prime Minister Narendra Modi, leading to frenzied and as yet unreported speculation of a rift between India’s two most powerful men.
Ambani set tongues wagging when he opted out of Modi’s much publicised five-day trip to Japan from August 30 to September 3. Others in the high-level business delegation included Adani chairman Gautam Adani, Sunil Bharti Mittal of Bharti Enterprises, Shashi Ruia of Essar, Azim Premji of Wipro and ICICI Bank chief Chanda Kochhar.
Not unreasonably many suspect Ambani is disappointed with Modi’s reluctance to implement a domestic gas price hike in line with the Rangarajan formula, twice approved by former PM Manmohan Singh’s cabinet but blocked by the Election Commission till after elections last May. Ambani was hoping Modi would prioritise the price hike but Modi is too shrewd an operator to back an unpopular price rise making him vulnerable to allegations of favouring Reliance.
“Modi’s a master of perception,” says a political observer. “Until he’s convinced of the price hike’s impact he’ll appoint one committee after another.
” Rangarajan’s formula more than doubles the $4.20/mmbtu Reliance currently receives for D6 gas. But Modi wants to know why Indian domestic gas prices must be linked to the price of LNG imports in countries like Japan and has asked oil ministry officials to explain why this should be so.