Why India Remains Our Favorite Emerging Markets Growth Story Post-Election

Key Takeaways

  • In his third term as prime minister of India, Narendra Modi is expected to focus on increased manufacturing, trade agreements and economic growth while continuing to maintain fiscal prudence and root out corruption.
  • Modi could aim to accelerate deployment of welfare schemes while continuing to improve on initiatives like direct benefits payments in order root out corruption and bring more people under the formal economy.
  • India’s equity markets have experienced strong growth and momentum, with rising incomes and political stability contributing to the country’s potential for accelerated growth.

Narendra Modi started the 2024 election campaign with an ambitious goal of exceeding the majority his party obtained in his prior two terms. The first exit polls suggested he would, but the reality turned out to be much slimmer. Yet Modi’s Bhartiya Janta Party (BJP) was still the single largest party with 240 seats. The BJP’s coalition, the National Democratic Alliance (NDA), scored 292 seats, thus comfortably beating the required majority of 272 seats to form a government. The opposing Indian National Congress (INC) won just 99 seats, making it a quite distant second.

It is clear the country voted largely for the incumbent government, even after two terms, a rare phenomenon in Indian politics.