India has started counting votes for its 2024 general election, with exit polls projecting a third consecutive term for Prime Minister Narendra Modi and his Bharatiya Janata Party-led National Democratic Alliance. The exit polls show the coalition winning an overwhelming majority in the lower house of parliament, although projections may not always be accurate. The party or coalition that wins at least 272 seats out of 543 forms the government.
Markets reacted positively to the exit polls, with key stock benchmarks Nifty 50 and Sensex gaining more than 3% and hitting record highs. The Nifty 50 closed at 23,263.90 and the Sensex closed at 76,468.78 following the exit poll results. This election marks the world’s largest democratic exercise, with almost a billion registered voters participating over a period of seven phases and more than six weeks.
Under Modi’s leadership, India’s economy has seen solid growth, with the latest GDP data showing an expansion of 8.2% in the fiscal year 2024. This growth rate exceeded the government’s initial forecast of 7.6%, positioning India as the fastest-growing large economy in the world. The focus of the new government will likely be on further boosting infrastructure development, an area that still lags behind China’s despite recent improvements.
Samir Kapadia, CEO of India Index and managing principal at Vogel Group, anticipates that Modi will continue to prioritize India’s economic growth in unprecedented ways. The development of infrastructure in India will be a key priority for the new government, with efforts to catch up to China’s advancements in this area. Despite the infrastructure gap, both countries are seen as having strong intellectual capital and the potential for further growth in global markets.
Steve Lawrence, chief investment officer of Balfour Capital Group, acknowledges that while India’s infrastructure is not yet on par with China’s, the country has the potential for significant progress in the future. Both India and China are recognized for their hardworking and educated societies, with a deep understanding of global markets. Lawrence believes that India has the capacity to catch up with China in terms of infrastructure development and intellectual prowess, offering a promising outlook for the country’s economic growth.
