Foreign investors hope likely Modi victory will ease business roadblocks

Lack of free trade pacts, high import tariffs, land acquisition woes among their concerns

- Rohini Mohan

Global businesses have been closely watching as millions of Indians line up to vote in the country's massive seven-phase election from April 19 to June 1.

The outcome of the democratic exercise is set to have far-reaching consequences for the world's fifthlargest economy.

Foreign investors are banking on the return of incumbent Prime Minister Narendra Modi to power for a third term to ease roadblocks such as a lack of free trade agreements, high import tariffs, land acquisition difficulties and the absence of local supply chains.

From 2014, when Mr Modi came to power, India rose 79 places in the World Bank's ease of doing business ranking to the 63rd spot among 190 countries in 2020.

Corporate tax rates have also been cut from 30 per cent to 22 per cent, some of the lowest among large economies.

India's annual gross domestic product (GDP) stood at US$3.7 trillion (S$5 trillion) in 2023, with a projected growth rate of 6.8 per cent against the global average of 3.2 per cent.

Income inequality is the highest since the 1960s, with the richest controlling 40 per cent of the country's wealth, and unemployment is a grave concern, but foreign investors saw these as opportunities for growth.

More global businesses than ever have a stake in India's economy today.

Mr Simon Lee, vice-president of the Taiwan Chamber of Commerce in India, said the ongoing polls were a "landmark election that will set the course for India's economy and manufacturing prowess".

Mr Lee is in charge of Taiwan's business interests in south India, where electronics giants like Foxconn and Pegatron are assembling 12 per cent to 15 per cent of the world's iPhones in a bid to diversify their operations out of China.

Aiming to make 40 per cent of iPhones by 2027, the Taiwanese companies have triggered the emergence of an electronics manufacturing hub in the southern region.