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Government Affairs

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Populism Wins Big in India’s Election

After over a month of voting, the world’s largest election has come to a conclusion in India. What was shaping up to be a close contest between current Prime Minister Narendra Modi of the Bharatiya Janata Party (BJP) and Rahul Gandhi of the Congress party ended in a landslide reelection win for Mr. Modi. Instead of the prospect of potentially forming a coalition government, Mr. Modi’s BJP party is on track to win well over the 272 parliamentary seats required to hold the majority. The election upset was so extreme that Mr. Gandhi even lost his own parliamentary seat, one he has held since 2004.

How This Impacts Mobility

The sheer size of India’s population and economy make the results of this election important to the mobility industry. Mr. Modi is viewed by many as pro-business. In his first term he took steps to simplify India’s tax code and to combat corruption. Following Mr. Modi’s reelection, India’s stock market hit a record high.

Still, the economy has been an issue for Mr. Modi. India’s unemployment rate continues to rise, and recently hit 7.2%, a 45-year high. It is possible that the government may take steps to decrease immigration and focus on channeling jobs to local workers.

Like many recent elections around the world, nationalism played a major factor in Mr. Modi’s campaign. In fact, one of Mr. Modi’s campaign slogans was “Nationalism is our inspiration.” Recent conflicts with Pakistan have allowed Mr. Modi to position himself as a strong leader who would protect India. This rise in nationalism is often used to distract from economic anxiety and increases the likelihood that India could take steps to limit immigration to support broader employment of Indian workers.

There are still more than 900 million people in India who are not fully connected to the internet yet, making this market a huge focus of the technology sector. Recently, the Indian government has taken steps to increase regulation of the internet and announced new rules regulating e-commerce. The impact of these new restrictions could impact the growth of many companies within India, and potentially the number of employees who may need to be relocated.

As one of the world’s largest economies, any potential steps taken to limit immigration would negatively affect the mobility industry. While there do not appear to be any imminent changes, India is the most recent example of how the rise of populism affects globalization and workforce flow. Worldwide ERC® will be sure to keep members informed of any changes that will impact the industry.

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