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How Modi Can Bring U.S. Business Back to India

Author: Alyssa Ayres, Senior Fellow for India, Pakistan, and South Asia
May 19, 2014


In the wake of India's elections, the country's newly-elected leader could very well turn around one of the world's largest economies and draw more U.S. investment. After a decade in opposition, the Bharatiya Janata Party has been returned to power, and Narendra Modi will become prime minister of the world's largest democracy. Not since Indira Gandhi have Indian citizens seen a campaign that so fused a politician's persona with that of his party along the lines of an American-style presidential election. There's no doubt now about the Modi wave.

Voters clearly welcomed Modi's hopeful message centered on economic growth and good governance; the election results will have a positive impact on India's economy—already, news of the final tally announced Friday pushed the Bombay Stock Exchange to record highs.

In the week ahead, all eyes will be on the team Modi selects to implement his agenda. He is expected to place strong emphasis on restoring higher rates of economic growth (India needs to get back to 8% and higher growth to support its large workforce-age population, but in the past few years growth has slowed, now below 5%). And there has been substantial speculation that he'll look to consolidate ministries, perhaps moving the international trade department into external affairs.

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