Loomis Sayles: India's election results will lead to slower policymaking

Loomis Sayles: India's election results will lead to slower policymaking

June 5, 2024

Politics India
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Ashish Chugh, Portfolio Manager at Loomis Sayles, comments the following on India's election results:

'The Indian elections resulted in a surprising outcome. While the exit polls had predicted a clear majority win by PM Modi’s BJP, the final results were much weaker, with the BJP winning 240 seats, far short of the 272 seats needed for a clear majority. Despite this setback, the BJP-led National Democratic Alliance coalition won a total of 292 seats. Thus, PM Modi will return as Prime Minister for a third consecutive term.

For the last ten years, the BJP was governing India with a clear majority. However, PM Modi will now have to work with coalition partners. This could lead to a slowdown in policy making and potentially more populist policies. However, we do believe that the BJP’s pro-growth, investor-friendly agenda will continue.

India has many structural growth drivers that will continue to play out despite the party in power. Furthermore, the last decade has seen significant investments in physical as well as digital infrastructure which will continue to drive productivity and economic growth. This election result does not change India’s path to becoming the third largest economy in the world in the next few years.'

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