Indian Prime Minister Modi’s third-term victory is a win for business: 'The sky is the limit'

INDIA – Lauded by Elon Musk on X and a congratulatory phone call from President Biden, India’s Prime Minister Narendra Modi slid into a third term as leader of the world’s largest democracy. Though he has less of a majority, his win is still seen as being pro-business. 

Musk, who is speculated to be looking to set up shop for Tesla in India, having met Modi on his visit to the U.S. in 2023, posted on X, "Congratulations @narendramodi on your victory in the world’s largest democratic elections! Looking forward to my companies doing exciting work in India."

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Modi, following his win, touted electronics, semiconductors and defense manufacturing, renewables, and the farm sectors as areas of special focus in his third term, without elaborating.

A readout of a phone call between President Biden and Modi noted, "The two leaders emphasized their commitment to deepening the U.S.-India Comprehensive and Global Strategic Partnership and to advancing their shared vision of a free, open and prosperous Indo-Pacific region." 

During Modi’s 2023 trip to Washington, Biden noted that the U.S.-India relationship was "booming," as he cited cooperation in several fields. Yet despite the growing friendship, last month it was reported by the Hindustan Times that China had overtaken the U.S. as India’s largest trading partner in 2024. China’s trade is worth $118.4 billion compared to the U.S. at $118.3 billion. 

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Both the IMF and the World Bank estimated that India was the fastest-growing economy in 2023 and things are humming along. India’s economy is expected to grow by 7.2% this year, stronger than expected, according to Fitch Ratings which updated its outlook on Tuesday. 

For the first time since he took power in 2014, Modi’s Bharatiya Janata Party (BJP) failed to win an overall majority and in fact lost more than 60 seats, bringing it down to 240 out of 543, which is not enough for a parliamentary majority, and therefore it will have to rely on coalition partners to cement its hold on power. 

Siddhartha Dubey, a journalism professor based in Evanston, Illinois, told FOX Business that this makes it "more challenging" for American and other foreign companies to invest, as India is in need of local labor reforms "to fill the niche of China". 

When asked if U.S.-India relations would change regardless of the outcome of the November presidential elections, Shaina Nana Chudasama, BJP spokesperson, told FOX Business that things would still be positive. "The prime minister has worked so hard to build up international relations. The sky is the limit." 

Chudasama looked to paint a rosier picture of Modi’s success, noting, "This has been an incredible victory for us." 

The BJP spokesperson seemed confident that the new Modi government will be able to continue with his program, noting, "This is still a majority mandate: governments have been formed and ruled with less seats in the past." 

She argued that in terms of absolute numbers, the number of votes that the BJP had received had increased from 171 million in 2014 to 229 million in 2019 to 235 million in 2024. "The recent U.S. presidential elections did not see a similar growth in popularity." she added.