Walmart Inc’s e-commerce unit Flipkart Online Services Pvt signed a pact with billionaire Gautam Adani’s conglomerate to build one of the largest retail warehouses in India, reported Bloomberg news on April 12, 2021.

The move is in preparation of a battle between Amazon Inc. and homegrown rivals to dominate the local market in India. Walmart and Adani’s partnership marks Adani entry into this battle for the online shopping space that also includes Reliance Industries Ltd., the conglomerate owned by Asia’s richest man Mukesh Ambani.

According to reports, each company wants a slice of the online market that is estimated to generate $200 billion in sales by 2026, especially considering pandemic regulations that distance people from physical shops.

A joint statement on Monday stated that Adani Logistics Ltd., a unit of Adani Ports & Special Economic Zone Ltd., will build a 5,34,000-square-feet fulfillment centre in its upcoming logistics hub at Mumbai, then lease it to Flipkart. The warehouse is expected to be operational in the third quarter of 2022 and at the size of about 11 football fields can store 10 million units of inventory.

Further, Bengaluru-based Flipkart will also develop its third data centre at Chennai’s AdaniConneX facility to help the e-commerce company keep its data within India, said the company. AdaniconneX is a joint venture between the U.S.’s EdgeConneX Inc. and Adani Enterprises Limited., the conglomerate’s flagship listed unit. The statement did not disclose financial terms of the partnership.

However, it is said that the new centre will likely be larger in area than the ones operated by Amazon, underscoring the potential size of the Indian market.

Adani Ports Chief Executive Officer Karan Adani told Bloomberg that the company considers it a great opportunity to serve Flipkart’s physical as well as digital infrastructure needs. The partnership also indicates Adani’s growing clout with his coal mining-to-data centres conglomerate that rapidly expanded and diversified across sectors, adding $24 billion to his net worth in 2021. Riding a massive rally in his companies’ shares, Adani’s wealth jumped to almost $58 billion — the fastest rise in wealth globally.

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On May 7, 2020, even as the rest of the country was reeling under the Covid-19 pandemic and the subsequent nationwide lockdown, the Directorate of Town and Country Planning, Haryana granted permission to Adani Agri Logistics (Panipat) Ltd. to change land use for setting up a warehouse for agricultural produce.

The permission is granted an area measuring 90015.623 Sqm in the revenue estate of village Naultha & Jondhan Kalan, Tehsil Israna, District Panipat for an amount of Rs. 27,00,469/- on account of conversion charges.

One of the conditions for granting permission is that Adani will “give at least 75% employment to the domiciles of Haryana where the posts are not of technical nature and a quarterly statement indicating the category wise total employment and of those who belongs to Haryana shall be furnished to the G.M.D.I.C. Panipat.”

The permission is valid for a period of two years. The permission memo may be viewed here: 

The timing of the CLU grant is curious given how the three agricultural bills were passed in September 2020. This has led many to believe that Adani was aware of the move and preparing for it.

The Communist Party of India Marxist Leninist (CPI-ML) shared a copy of the permission memo on Facebook stating, “Nearly a month before the agri ordinances were approved by the cabinet, Haryana govt permitted the setting up of a warehouse by the #Adani group on more than 22 acres of land with a conversion fee of only 27 lakh rupees. The bills just followed.”

Adani has already started construction of silos for storage of foodgrains procured by the Food Corporation of India (FCI) on the land. SabrangIndia had reported earlier on how it was in June 2016, that Adani Agri Logistics Ltd (AALL) a part of Adani Ports and Logistics first entered into an agreement with the FCI to build two silos to store wheat. These were to be constructed in Kotkapura in Punjab and Katihar in Bihar. The two silos were to have a joint capacity of 75,000 tonnes and the project was estimated to cost Rs 80 crores. But as the project grew many new silos were constructed.

As per AALL’s website, “Adani Agri Logistics Limited (AALL) has signed an exclusive service agreement with the Food Corporation of India. The project has been implemented at a total cost of nearly Rs. 700 crores.” AALL explains further, “The key feature of the project is that the entire handling of the food grains, right from receiving at Base Depots, cleaning and drying as well as storage and transportation to field depots is carried out in bulk form, thus minimizing the losses. These units are notified procurement centers of FCI, where farmers deliver their produce directly in bulk form.”

Balraj Singh, sarpanch of Naultha told The Tribune that the Adani group had started purchasing land in the region three years ago and construction began a few months ago. “The group started purchasing land nearly three years back and paid Rs 30 lakh per acre to farmers to begin with. Gradually, it kept revising the rates and the price went up to Rs 2 crore per acre, leaving landowners who sold their land initially a little sore,” said Singh. He also said, “The land purchased by the group was not cultivable. It does not have any supply for irrigation and the water in the area is brackish, making it unsuitable for cultivation.”

The land purchased by the group in Naultha is close to the highway and next to a railway track. Construction also began in Jondhan Kalan about a month ago.

However, Adani group has clarified in a statement posted on Twitter that it neither buys foodgrains from farmers, nor does it have a role in deciding prices of foodgrains, in wake of allegations of hoarding and appropriation of railway lines by a Youtube channel:

https://twitter.com/AdaniOnline/status/1336333077757345801

#FakeNewsAlert

Our statement in response to the misleading video posted by the Loktantra TV YouTube channel that is leveraging the ongoing farmer crisis in order to malign our reputation and misguide public opinion. #FakeNews pic.twitter.com/k4eeEGTpHa

— Adani Group (@AdaniOnline) December 8, 2020

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