Monday, May 26, 2014


BJP prime minister-elect Narendra Modi already indicated a model shift in India's foreign policy as he invited SAARC leaders including Pakistan Prime Minister Nawaz Sharif to attend his swearing-in ceremony in New Delhi on 26 May. The move came as a surprise and got due gratitude from politicians in Jammu and Kashmir and specialists in foreign affairs. "Modi wants to signal that India wants to improve bonds with its neighboring countries.” The victory is expected to improve trade ties between New Delhi & Washington and could eventually lift U.S. exports in industries ranging from pharmaceutical products to heavy infrastructure, U.S. officials and business leaders say.

For investors?

One has to look at the Indian stock markets to see what investors think of the results of India’s national election, which appear to show a landslide victory for opposition leader Narendra Modi. At the opening on Friday, the standard Sensex index was up more than 4.5%, the strongest opening for the Indian markets in five years. India has often been impeded by policy paralysis caused by unstable alliances, this would help the new government to act more decisively.

Can India’s economy take on China?

The chances of India getting back on its feet look much brighter, the country's biggest election win in 30 years, and that raises India's growth potential to as high as 8 percent per annum, economist say. "The resounding victory by the BJP-led alliance in Indian elections likely ushers in a period of significant economic reform in India. Reforms are likely to focus on improving the business environment, privatization reducing the budget deficit and support for inflation targeting," Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney, said in a note.

Revive India’s Economic Miracle?

Modi will take over an economy badly in need of change. Growth in the last fiscal year is expected to clock in under 5% — well below the 8%-9% pace enjoyed only a few years ago.
The World Bank ranks India a miserable 134th out of 189 countries on its ease of doing business index, which measures the difficulties faced starting a company, dealing with construction permits and other factors behind competitors like China or Indonesia. Without a boost to investment, the economy will continue to stumble. That means Modi will have to strip out red tape and streamline bureaucratic procedures to make it less burdensome for companies to invest and create jobs.

How far Modi’s Election win will impact on India? Is it really a turning point?  Will our India become a developed nation in 2020? Well let’s wait for the answer.