View: The ‘Modi-fication’ of India is still thrilling markets
investors were right to back him as an agent of change, Modi’s Bharatiya Janata Party peppered its 2014 poll manifesto with 22 references to “reform.”
Ten years later, very little remains of that zeal. The BJP’s 2024 manifesto still promises to “reform, perform, transform.” But the few specifics it offers on the economy are modest — such as automatic approvals for standard housing designs. Gone are the days when Modi pledged to change everything from inefficient markets in labor and farm produce to entire sectors like banking.
And yet, the appetite for a third term for the Indian leader is very high in the global financial industry. “Modi has done an unbelievable job in India,” JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Tuesday at the Economic Club of New York. Both Goldman and JPMorgan are predicting a deluge of overseas capital after general elections are over on June 4. (The BJP is favorite to win the contest.)
Still, this is the start of a new compact between markets and Modi, one in which investors are betting on what he won’t do, rather than what he will.
The first belief is that while Modi 3.0 may take a more authoritarian turn, the Indian leader won’t follow the lead of China’s President Xi Jinping. The stock market will still have to read the tea leaves to figure out which business group is likely to be blessed with juicy contracts and favorable policy, but there is little risk of New Delhi turning the screws on the private sector. In other words, no nasty surprises like Beijing’s
