When the image of one of the world’s richest businessmen comes under a cloud, questions are bound to rain from across the globe. So it has been since the New York-based short-seller, Hindenburg Research, accused the Adani Group of using a host of dubious practices to propel its rise. Gautam Adani, the founder and face of the conglomerate, has denied the allegations. But they have proven to be sticky and, increasingly, a diplomatic headache for India. Compounding the challenge for India is the allegedly warm friendship that Mr Adani has enjoyed with the prime minister, Narendra Modi, under whose tenure — first as chief minister of Gujarat and then as the nation’s leader — Mr Adani emerged from being a prominent businessman to, briefly, the planet’s second-richest person. That relationship — Mr Modi has flown on Mr Adani’s private jets and his government, the word is, has given special exemptions to the industrialist’s businesses — means that the concerns over Mr Adani’s business have led to legitimate questions globally. After all, Mr Adani has been a marquee member of Mr Modi’s delegation on several overseas trips. So far, however, Mr Modi’s team has responded to the diplomatic challenge rather undiplomatically.

Broadly, the controversy, which has seen Mr Adani’s wealth shrink to a third of what it was at the start of the year, has sparked two sets of responses internationally. Israel, where Mr Adani has only recently bought Haifa port and has shown interest in other projects, has indicated that it is keen to continue that relationship. On the other hand, regulators in the United Kingdom and Australia have said that they will scrutinise the allegations against Mr Adani while in the United States of America, the billionaire philanthropist, George Soros, has said that he believes Mr Adani’s troubles might also reflect on Mr Modi’s political fortunes. Instead of trying to distance Mr Modi from Mr Adani, ministers have turned to conspiracy theories accusing critics of plotting the prime minister’s downfall. Their nervous responses have served to deepen perceptions that Mr Adani’s rise has roots in his ties with Mr Modi. Diplomatically, that is dangerous for India. Mr Modi’s government must make it clear to international partners that how they deal with the allegations will not affect bilateral ties with India. It must insulate the country’s economy from any adverse effects of the Adani saga.