The Global Implications Of Modi's Victory
BMI View: India under Narendra Modi will be considerably more assertive on the Asian geopolitical stage. In particular, a more robust Indian foreign policy stance will counterbalance China and benefit Japan and the US. The main constraint on Modi's assertiveness will be his urgent need to revive India's economy, which has slowed sharply in recent years.
The landslide victory of Narendra Modi and the Hindu nationalist Bharatiya Janata Party (BJP) in India's general election will result in a considerably more high-profile foreign policy, which has arguably been somewhat low key under the outgoing Congress Party-led government of Manmohan Singh (2004-2014). We expect India to become more assertive on the regional stage, particularly towards China and Pakistan, although Modi's pro-business stance implies that relations with Beijing will also have a strong pragmatic element. We anticipate a boost to India-Japan relations, owing to their mutual concerns about the rise of China, and the fact that Japan wishes to cultivate India as a major market for its goods and services. The main constraint on Modi's assertiveness will be his urgent need to revive India's economy, which has slowed sharply in recent years, from 9.0%+ rates in the late 2000s to our estimate of 4.4% in FY2013/2014 (April-March).
BJP's Last Period In Office Suggests Tougher Foreign Policy Stance
|Rising Interests Overseas|
|India's Geopolitical Realm|