Narendra Modi has claimed a landslide victory in the historic Indian election, securing 282 out of 543 Lok Sabha, or lower house, seats. The numbers provide incontrovertible evidence of the "Modi wave" sweeping through India, which will also make ripples on the shores of Australian business.
And corporate leaders in India have welcomed the change. The Sensex hit a new record high, up 1000 points before it started to settle, as Modi's BJP party established its lead.
This is a historic election on many fronts. It is the first time a non-Congress led party has won absolute majority since India's independence, and the first election of its kind fought in the media, in particular social media. Most importantly, it marks the end of the Gandhian dynastic rule, which has governed India for the best part of 67 years.
The Indian election constitutes the largest democratic event in the world and is characterised by its scale and complexity. Over 817 million registered voters voted electronically over six weeks in nine phases across the country. Within an hour of counting across 989 counting centres, the tsunami against the incumbent government became apparent. The strength of this mandate could mark the beginning of a new era for modern India.
Governance, economic development, jobs growth and anti-corruption were key messages that resonated with the aspiring youth, disenchanted by an incumbent government with a poor economic record in the past decade. Policy paralysis, rising inflation, a widening current account deficit, an unstable currency and runaway corruption created the perfect storm which led to the angry anti-incumbency vote at the polls.
Modi is known for investor-friendly policies and the turnaround he achieved in the Gujarat state economy has been led by his focus on entrepreneurship, innovation and industrialisation. The state has recorded some of India's most impressive growth figures and boasts the world’s largest oil refinery, a thriving agricultural sector, modern infrastructure and 24-hour electricity. Gujarati business leaders see Modi as an administrative wizard who has cut red tape, countered bureaucratic lethargy and wiped out petty corruption. It is this "Shining Gujarat" model that Modi promises to replicate across India as Prime Minister.
For Australian businesses the new leadership is a signal that the largest democracy in the world is open for business and should be back on our radar. Modi has indicated significant investments in infrastructure, manufacturing, education and healthcare, which will see growth in demand for our skills, services and ‘know how’ in these sectors.
The BJP's election manifesto provides a blueprint of India's plan for development. Modi has announced a plan to build 100 new cities, giving rise to a large new market for Australian resources as demand from China slows in keeping with its phase of development.
Job creation for the youth lies at the heart of Modi's economic model for India. To achieve this mission, Modi's India will prepare to become a global hub for cost-competitive, labour-intensive manufacturing. As he demonstrated in the election campaign, technology will be leveraged to expand reach and coverage for the delivery of eGovernance and eHealthcare, via telemedicine.
To fulfil the vision of a knowledge economy, Modi will drive a comprehensive education agenda, including one that aims to increase employability of the youth. Australian knowhow can drive India's capacity-building agenda across healthcare, teacher training, vocational education and governance.
The Modi manifesto makes specific reference to building sporting academies to foster development of sporting talent in India. This is an area where Australia could play a leading role, helping to drive the development of the sports industry in India.
However sustainable development is not possible in the absence of basic amenities for the vast majority of people living in rural regions. Australian knowhow in waste management, disease prevention, water treatment, irrigation technologies, aquaculture, advanced fish farming techniques are just some examples of our capability that could be applied to lift living standards for millions in India.
Doing business in India can be fraught with risk and complexity. However, not engaging with India's economic growth agenda could result in an even greater opportunity cost.
Rohini Kappadath is Pitcher Partners' Head of Cross-Border Business.