India Inc. is showing its support for one-party rule after the market reaction to the results of the general election in India. On June 4th, Mumbai-listed stocks lost a total market value of $400 billion when it was revealed that the ruling Bharatiya Janata Party (BJP) would need coalition partners to govern, rather than securing a big majority as predicted by exit polls.
Despite initial panic from investors, the Mumbai bourse had recovered all its losses by June 10th. This was due to Prime Minister Narendra Modi quickly assembling a coalition that was seen as supportive of his pro-business economic agenda. The corporate elite of India celebrated at the presidential palace as Mr. Modi was sworn in for a third term as prime minister, marking the beginning of “Modi 3.0.”
The new government under Modi 3.0 seems to be continuing with a similar pro-business approach as seen in earlier versions of his government. With one-party rule worth around $400 billion to India Inc., it’s clear that Modi’s economic agenda is a driving force behind this support.