India’s 2024 General Election – Modi Cements Power
As India commences its next general election, the incumbent Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) aims to further consolidate its political dominance. Scheduled over six weeks between April and May 2024 with close to a billion registered voters, India’s election will conclude with the announcement of results in early June. Most opinion polls point to the BJP-led coalition, the National Democratic Alliance (NDA), regaining power for a third consecutive five-year term.
Modi and the BJP Poised for Victory Despite Criticism from Certain Quarters
The BJP-led coalition’s likely third successive electoral victory would be the second time this has happened in India’s political history. In spite of his divisive reputation, Modi is undeniably the driving force behind the BJP’s continued success. Modi’s popularity as prime minister over the last decade is due to several factors, including a rise in India’s global stature due to an assertive foreign policy and his party’s focus on a Hindu nationalist ideology.
The BJP’s re-election efforts are helped by weak and disparate opposition parties. The Indian National Congress (INC), the BJP’s main rival, has been unpopular among voters with low approval ratings in recent years. The party’s failures are in part due to the ineffective leadership of the Gandhi family – Rahul Gandhi and his mother Sonia Gandhi – who continue to dictate its strategic direction, and a failed attempt at coalition building to counteract the NDA. In mid-2023, the INC along with over 25 opposition parties established the Indian National Developmental Inclusive Alliance (INDIA). INDIA has been fragmented by internal power struggles and defections by key political leaders such as Bihar’s Chief Minister Nitish Kumar who abandoned the INDIA alliance to realign with the BJP earlier this year.
Despite enjoying widespread support, the Modi government has also faced substantial criticism. Opposition leaders, civil society organisations, activists and journalists accuse the administration of inflaming communal tensions, discriminating against religious minorities, and using law enforcement to target political opponents – claims that the ruling party has vehemently denied. Critics point to a rise in anti-Muslim sentiment and violence under Modi’s leadership as a key concern when discussing the party’s track record. The Modi government has regularly been criticised for domestic law enforcement’s handling of certain incidents of religious violence and protests, and the lack of accountability for perpetrators. Rights groups such as Amnesty International and Human Rights Watch have, on multiple occasions, called on the Modi government to address human rights abuses and harsh clampdowns on anti-government activities, such as arbitrary arrests of journalists, lawyers and students. In addition, a recently passed contentious citizenship law that provides a route to Indian citizenship for persecuted religious minorities has drawn international condemnation for discriminating against Muslim refugees. The US non-profit Freedom House rates India as “partly free” in its 2024 report, highlighting concerns about a decline in civil liberties in the country with respect to freedom of expression and freedom of religion.
Other factors that will likely impact the BJP’s vote share in the election include concerns over unemployment and inflation among low-to-middle income Indians and widespread anti-Modi sentiment in southern Indian states which have historically elected regional parties. Another ray of hope for government opponents is the BJP’s role in the controversial electoral bond scheme – a process through which companies and individuals could make anonymous donations to political parties and which the BJP appears to have leveraged to great effect. This scheme was declared unconstitutional by India’s Supreme Court in February 2024 and will likely lead to increased scrutiny of the BJP’s financial affairs in the coming months.
Modi’s Core Focus on Foreign Affairs
While domestic issues such as inflation, employment, communal divides and corruption are generally what Indian voters care most about, the BJP’s assertive foreign policy has been publicised as a key achievement during the campaign. In Modi’s last two terms, India has hosted world leaders during the G20 summit; deepened strategic and economic alliances with Western and Arab nations; promoted regional cooperation and economic alliances with its proximate South Asian countries under Modi’s “Neighbourhood First” policy; achieved its first moon landing; and become the fifth-largest economy globally.
India’s economic growth on the global stage has benefited from its favourable demographics (65% of the population is under the age of 35), its position as an attractive and viable manufacturing alternative to China, and its strategic location in the Indo-Pacific region. Several geopolitical commentators suggest that India is positioned to become a global superpower by the end of the decade.
Modi’s not-so-secret weapon in foreign policy has been his de facto spokesperson – Indian external affairs minister Subrahmanyam Jaishankar whose remarks have gone viral for their bold and snappy tone. For example, a Jaishankar rejoinder that got millions of views on social media was at a 2023 global security conference, when he defended India’s neutral stance on the Russia-Ukraine war and its purchases of Russian oil. He dismissed such concerns by quipping: “Europe has to grow out of the mindset that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s problems.”
Notwithstanding its achievements, the Modi administration’s aggressive foreign policy stance has not gone uncriticised. Apart from its relationship with Russia being unpalatable to Western nations after the 2022 invasion of Ukraine, the country has been the subject of several other geopolitical controversies. For example, recent diplomatic rows with Canada and Pakistan over the alleged extrajudicial assassinations of their nationals by Indian intelligence agencies have had a negative impact on the Modi government’s international reputation.
View on Anti-Corruption and Law Enforcement Agencies
India’s anti-corruption and law enforcement agencies, including the Enforcement Directorate (ED) and the Central Bureau of Investigation, have at times been politicised since their formation, a trend which has noticeably increased under Modi. Government critics say the incumbent administration is using these agencies as a means to silence political opponents. In a recent example, India’s Income Tax Department froze a number of bank accounts linked to the INC, which the party claimed was an attempt to cripple it before the general election.
Critics call the recent arrest in March 2024 of Arvind Kejriwal – the leader of the opposition Aam Aadmi Party (AAP) and the current chief minister of Delhi – as a case in point. Kejriwal was arrested by the ED on charges of money laundering and corruption relating to an excise policy that was formulated by the Delhi government in 2021 and 2022. Many viewed the move as politically motivated and orchestrated by the Modi government to target some of its fiercest critics in the run up to the elections. Another BJP win suggests that the ED and other law enforcement organisations may continue to be used to target the ruling party’s adversaries, including politicians and businesspersons.
More generally, the BJP’s track record at tackling corruption has been mixed. India's ranking in Transparency International's Corruption Perceptions Index (CPI) has varied over the years under Modi’s tenure, with some years showing improvement and others showing stagnation or decline. The country was ranked 93/180 countries on the 2023 CPI, higher than some of its regional neighbours such as Pakistan, Sri Lanka and Bangladesh, but lower than China and other key players in Southeast Asia and the Middle East. Over the last decade, large-scale public corruption at the central government level appears to have declined under Modi’s leadership purportedly due to anti-corruption measures and legislative reforms to enhance transparency, such as corporate insolvency laws and tighter scrutiny of the real estate sector. That said, there remain serious concerns about the transparency of political funding, the existence of crony capitalism, and the pervasiveness of corruption at various government institutions that the administration will need to address to improve its image moving forward.
Economic and Foreign Investment Outlook
The BJP’s efforts to grow the Indian economy since coming to power in 2014, including an increased focus on infrastructure and opening up foreign direct investment (FDI) in various sectors, have demonstrably borne fruit. The country’s real GDP has grown by 6-9% in the post-pandemic era (2021-2023) and is projected to grow 6-7% in 2024-25.
India has climbed up the World Bank’s Ease of Doing Business index from 142nd in 2014 to 63rd in 2019. In addition, a report published by the United Nations Conference on Trade and Development ranked India as the eighth-highest recipient of FDI in 2022, the third-highest recipient of FDI in greenfield projects (behind the US and the UK) and the second-highest recipient in international project finance deals (behind the US). The country’s attractiveness as a business-friendly jurisdiction doesn’t seem to be waning, as multinationals look to expand operations in the country as a way to diversify their supply chains away from China.
Evidencing the above, US technology giant Apple announced plans in late 2023 to ramp up manufacturing capabilities in India with the aim of producing more than 50 million iPhones in the country every year. More recently, the Texas-headquartered multinational electric vehicle manufacturer Tesla – which currently manufactures vehicles in the US, Germany and China – is considering setting up a manufacturing facility in India.
If the BJP wins, we can expect to see a continued focus on manufacturing and exports, as well as sectors such as defence, energy and infrastructure. Local manufacturing will be spurred on by various free trade agreements, including the USD 100 billion deal that India signed with Norway, Switzerland, Iceland and Liechtenstein in March 2024. That said, investors should still be cautious – there will undoubtedly be a continuing reliance on certain protectionist policies. These include mandatory government approvals for foreign investment in strategic sectors such as defence, media, banking, and telecommunications, among others; trade barriers such as tariffs and import restrictions; strict regulation of foreign exchange transactions; and agricultural protectionism. Such policies have historically drawn criticism from foreign companies, though they remain a key and effective BJP tactic to shore up its conservative, rural base.