What next India?

Modi wins landslide re-election victory . . .

Following the largest democratic exercise in history, Indian Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) will add to their majority in India’s Lok Sabha (lower house), campaigning on a “Nationalism is our inspiration” slogan. The BJP won at least 303 of the body’s 545 seats as results of the election process were announced this week, and picked up support beyond the BJP’s usual Hindu-belt strongholds. In contrast, it was a repeat under-performance for the storied Indian National Congress party, which came away with only 52 seats.

Markets react . . .

In response to the news, India’s stock market hit an all-time high. Analysts interpreted the election results as a vote for stability and of confidence in Modi’s ability to keep the economy humming. This despite his failed de-monetization policy and bungled GST roll-out. The country’s many unemployed and under-employed youth hope Modi will make good on an unfulfilled pledge to create 10 million new jobs. Not everyone in India took comfort in a re-emboldened BJP. The party’s Hindu nationalism took on a strident tone during the campaign period, and Muslims and lower-caste Dalits have been victims of an escalation in communal violence.

A step closer to free trade?

This time, Modi’s election campaign focused less on economics and more on national security. But a second term could allow his government to deliver on promised economic reforms. For Canada, this could mean completing the Comprehensive Economic Partnership Agreement with India, giving Canadian businesses greater access to a market of 1.3 billion people and a growing middle class. It’s uncertain however, if the BJP’s Hindu-first politics will impact Canada’s priority of ‘progressive’ free trade.