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Government Affairs

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Look Ahead at India’s Upcoming Election

When India—the world’s largest democracy—heads to the polls to elect new leaders this week, it will undoubtedly have an impact on mobility. Voting begins this Thursday, April 11 and will be held in seven phases, with the final ballots cast through May 19. On May 23, votes will be counted and results announced. Currently, the election is shaping up to be a contest between two main front-runners: current Prime Minister Narendra Modi of the Bharatiya Janata Party (BJP) and Rahul Gandhi of the Congress party. Despite Prime Minister Modi winning in a landslide in 2014, this year’s election looks to be a tighter race.

The economy is a central issue in this year’s election. India’s population continues to grow at a rapid rate and is on track to overtake China as the world’s most populous country as early as 2024. This population growth means millions of young people are entering the workforce this year in search of good job prospects. While India has experienced strong economic growth over the past few years, at the end of 2018, the country’s unemployment rate rose to 6.1%—the highest rate in 45 years. As of February 2019, the unemployment rate has crept up even further, to 7.2%. In 2019, the International Monetary Fund is predicting that India is set to overtake the UK at fifth place in the rankings of the world’s largest economies.

India’s farming industry is experiencing a continuing crisis: a combination of lower crop prices, declining productivity and increased costs have put enormous strain on Indian farmers. With over half of the country’s population working on farms, farmers represent a powerful voting block in the upcoming election. While Modi has proposed plans to assist struggling farmers, there have been ongoing protests as farmers continue to express their resentment of previous policy failures. The farming community is expected to play a pivotal role in the outcome of this year’s election.

While India has received substantial foreign investment over the past few years, tech companies have recently been hit with new regulations. Recently, the Indian government has taken steps to increase regulation of the internet and announced new rules regulating e-commerce. These new restrictions could influence the growth of many companies within India, and potentially, the number of employees who may need to be relocated. It is unclear at this point if the outcome of the election will have an impact on these new rules.

How This Impacts Mobility

The sheer size of India’s population and economy make the results of this election important to the mobility industry. If India’s unemployment rate continues to rise, it’s possible that the government may take steps to decrease immigration and focus on getting jobs to local workers. In addition, as there is a strong relationship between connectivity and economic advancement—but there are over 900 million people in India who are not yet fully connected to the Internet—this market is a huge focus for the technology sector. Worldwide ERC® will be monitoring the ongoing election and its aftermath and providing analysis on the impact to the mobility industry.

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