The value of one-party rule to India Inc was clear in the market reaction to the results of the general election, with Mumbai-listed stocks losing around $400bn on June 4th. Initially, there was concern that the ruling Bharatiya Janata Party (BJP) would need coalition partners to govern, rather than securing a big majority as exit polls had predicted. However, investors’ panic was short-lived as the Mumbai bourse had recovered all its losses by June 10th, following Mr. Modi’s quick assembly of a coalition supportive of his pro-business economic agenda.
The swearing in of Mr. Modi for a third term as prime minister was met with applause from corporate India, signaling continuity in the government’s approach. Modi 3.0, as Indians are calling the new government, appears to be in line with previous versions in terms of its business-friendly policies and support from the corporate sector. The coalition formed by Mr. Modi is perceived to be sympathetic to his economic agenda, which has reassured investors and helped to regain lost market value.
The swift response to the election results and the formation of a supportive coalition have demonstrated the value that one-party rule can bring to India Inc, at least in terms of market stability and investor confidence. The future of India’s economy under Modi 3.0 looks promising, with expectations of continued growth and support for business interests.
