Prospects for India in 2017

Subject Prospects for India in 2017. Significance As 2017 approaches, both hope and uncertainty prevail regarding India's economic prospects. Politically, the opposition to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP)-led government is still ineffective, but important regional elections will test the BJP next year. India's diplomatic outreach will be complicated not least by the election of Donald Trump as the next US president.

Subject Prospects for India to end-2016. Significance Policymakers are counting on improved agrarian performance, cheaper credit and economic diplomacy to drive growth in coming months. On the political front, after a modest triumph in the last round of regional elections, Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) are emboldened but still politically encumbered.


Significance Canada’s Liberal Prime Minister Justin Trudeau is preparing to welcome a more predictable and stable partner in Biden than outgoing Republican President Donald Trump. However, Biden is also expected quickly to cancel the Keystone XL pipeline, cutting another lifeline to Canada’s oil industry and creating some strain in Canada-US ties. Impacts Improved Canada-US ties will persist even if Trudeau loses the next federal election to Conservative Erin O’Toole. Canada will re-engage militarily with UN peacekeeping and NATO deployments. Trudeau will encourage Biden to end US prosecution of Meng Wanzhou, allowing Canada to release her; Biden may agree. Canada’s border with the United States will open in stages as COVID-19 recedes. Ottawa will push Biden to end ‘Buy American’ procurement policies, with little success.


Significance However, the departure of former US President Donald Trump -- who was an enthusiastic supporter of Brexit and UK Prime Minister Boris Johnson -- has made this harder to achieve. Impacts Johnson will consider holding a snap election in 2023 to capitalise on the successful vaccination campaign and economic reopening. The failure to conclude a US-UK FTA would increase the prospects of an EU-UK veterinary agreement. Without a UK-EU veterinary agreement, the chances of persistent disruption on trade between Great Britain and Northern Ireland will grow.


Significance Each of these states except Punjab has a government led by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP). Punjab is one of just three states with a chief minister that belongs to India’s main opposition Congress party. Impacts A poor showing by Congress would further reduce its leverage with other opposition parties in talks over forming a broad anti-Modi alliance. Victory in UP would enhance Chief Minister Yogi Adityanath’s national profile. Election campaigning will likely lead to a spike in COVID-19 cases.


Subject E-commerce in India. Significance Following nationwide protests from small traders in late 2014, key sections of the Bharatiya Janata Party (BJP) government have demanded that Prime Minister Narendra Modi act against India's rapidly growing e-commerce platforms. Particular targets are the largest e-commerce players, mostly Indian, but including Amazon India, which have benefitted from large infusions of foreign capital and stand accused of side-stepping India's strict limits on foreign investment in multi-brand retail. Impacts Any improvement in transport and distribution infrastructure will boost e-commerce. Proliferation of mobile and banking facilities is key to expanding online retail. Small traders will oppose the expansion of e-commerce, causing greater political losses for the BJP than any other party.


Subject Prospects for India in 2016. Significance Prime Minister Narendra Modi's government has accelerated its agenda of piecemeal and sequential reform following his Bharatiya Janata Party (BJP)'s defeat in the Bihar elections last month. As difficult state elections approach in the first half of 2016, the government is banking on these reforms and headline growth to secure voter and investor support. In foreign policy, the government is likely to focus on regions of strategic importance, especially Russia and the Middle East.


Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Subject The likely strategy of the BJP's opponents. Significance The opposition to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) lacks a coherent strategy at national level ahead of elections due in 2019. However, the large turnout at a public rally in Patna late last month, where Lalu Prasad Yadav brought together representatives of 18 opposition parties, suggests that there is popular support for a challenge to the BJP. Impacts States in which elections are due are more likely to see outbreaks of communal violence. Sonia Gandhi will come under increasing pressure to relinquish leadership of the Congress party. The BJP may support the creation of a separate Gorkhaland, at the risk of alienating support in the rest of West Bengal.


Significance Following the victory of his Pakistan Tehreek-e-Insaf (PTI) in elections late last month, he expressed a wish to improve relations with Pakistan's neighbour and traditional enemy India, especially on the disputed Kashmir valley. Indian Prime Minister Narendra Modi, whose Hindu nationalist Bharatiya Janata Party (BJP) will seek to retain power in elections early next year, congratulated Khan on his poll win. Impacts Pakistan’s military may try to influence the Afghan parliamentary election in October. The security of Indian-administered Kashmir will deteriorate. India will lobby the United States to exert further political and economic pressure on Pakistan over cross-border militancy.


Subject Prospects for India in 2018. Significance India’s ruling Bharatiya Janata Party (BJP) has responded to the recent economic slowdown by drawing up plans to recapitalise public sector banks (PSBs) and invest in infrastructure. Prime Minister Narendra Modi is also under pressure to create jobs. The government will be expected to deliver on its promises with elections due in around 18 months’ time.


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