India’s 2024 general election was won by the National Democratic Alliance (NDA), but with a smaller majority than in 2019. Goldman Sachs, JP Morgan, CLSA, UBS, Bernstein, and Citi all did research after the election that suggests this smaller mandate may push the government, which is known for making India a global manufacturing powerhouse and investing in areas that make the country less dependent on Western countries, to take a more populist stance in its third term, putting the needs of lower-income groups and rural development first.
The NDA is likely to win, which means that policies will stay the same for companies and startups, and money will continue to be spent on infrastructure, digitization, and manufacturing. The smaller margin, on the other hand, could mean that resources are moved to rural and welfare programs, which could affect some plans for capital expenditures, the brokerage companies said. Adani Group, a huge company that makes things, lost about $45 billion this Tuesday.
The ruling party’s strong attitude on digital sovereignty and its recent fights with Big Tech are also likely to stay the same. In the past five years, the Narendra Modi government has passed or proposed a lot of laws that have scared big tech companies. For example, they are trying to regulate internet apps, they are forcing streaming services to check content for obscenity, and they were sued by WhatsApp for making the Meta app break encryption.
New Delhi has said that its plans are meant to protect the interests of its people.
The United States has a lot of friends in India, and those countries are working harder and harder to build their own tech stacks that can compete with many popular American products. For instance, Rupay is India’s answer to Visa and Mastercard, while UPI, a real-time, open payments system created by Indian banks, is already widely used in India and handles more transactions than all card networks put together.
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In the past few years, India has quickly become a global manufacturing hub. Companies like Apple, Samsung, and Google have been lured there by lucrative benefits to move more of their assembly needs to India. Goldman Sachs and Citi said that India is likely to keep focusing on industry, but that the country may not get as much money as it thought it would in the future.
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