The election win of the Modi-led coalition indicates continuity of policy in India, but also austerity

The National Democratic Alliance (NDA) emerged victorious in the 2024 Indian general election, but with a smaller majority than in 2019. According to post-election analysis by Goldman Sachs, JP Morgan, CLSA, UBS, Bernstein and Citi This slimmer mandate could potentially push the government – ​​known for transforming India into a global manufacturing power and making investments in sectors to reduce the country's dependence on Western countries – to adopt a more populist approach in its third term. position, prioritizing the demands of lower income segments and rural development.

The NDA's likely victory signals policy continuity for companies and startups, with continued investments in infrastructure, digitalization and manufacturing. However, the smaller margin could lead to a reallocation of resources to rural and welfare initiatives, potentially impacting certain investment plans, the brokerage firms warned. (About $45 billion in value was wiped out of manufacturing giant Adani Group on Tuesday.)

The ruling party's assertive stance on digital sovereignty and its recent clashes with Big Tech are also likely to continue. Over the past five years, Narendra Modi's government has enforced or proposed many laws — including attempting to regulate internet apps, making streaming services review content for obscenity, and getting sued by WhatsApp for demanding the Meta app break encryption. scared big tech companies.

New Delhi has argued that its proposals are trying to protect the interests of its citizens.

The likely agenda of the next NDA government. Image and projection: Citi

India, a US ally, is also increasingly trying to build a tech stack that can rival many popular, and mostly American, offerings. For example, Rupay is India's attempt to rival card networks Visa and Mastercard, while UPI, an interoperable and real-time payment system built by Indian banks, has already become ubiquitous in India and processes more transactions than all card networks combined.

India has also quickly positioned itself as a global manufacturing center in recent years, attracting companies like Apple, Samsung and Google with lucrative incentives to shift more of their assembly needs to India. Goldman Sachs and Citi said it is likely that India will continue to focus on manufacturing, but the budget allocation going forward may be lower than expected.

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