The Food Corporation of India’s Rs 20,000 crore silo programme was supposed to modernise how India stores its foodgrain stocks for the public distribution system. Instead, it ended up concentrating thousands of crores worth of contracts in the hands of just two companies.

Across two phases of FCI’s “Hub and Spoke” silo scheme, Adani Agri Logistics Ltd and Leap India Food & Logistics Private Ltd together bagged 110 out of 134 silo contracts worth more than Rs 16,500 crore. Around 46.5 lakh metric tonnes (LMT) of grains, out of the total 60, will be stored in silos owned by these two companies. 

What makes the concentration striking is that FCI itself had initially proposed an “anti-monopoly” clause to stop a single company from cornering the projects. But in a crucial 2022 meeting, NITI Aayog and the Department of Economic Affairs opposed the restriction. Their argument was to let market forces prevail. The clause was dropped. 

Soon after, Adani won every single contract in the second round of Phase 1. By Phase 2, a duopoly had emerged. Adani and Leap dominated India’s largest modern grain storage programme.

India’s competition watchdog, the Competition Commission of India, flags excessive market concentration and monopolistic behaviour across sectors. In the case of the silo project, government departments themselves pushed for the removal of safeguards in ways that favoured large corporations over smaller players. Though both AAL and LIFL were the lowest bidders in the contracts they bagged, such concentration would not have been possible with anti-monopoly safeguards.