Indian economy’s key role in global recovery boosted by Congress victory

By Raghavendra Verma, in New Delhi

The recent victory of the Congress party in the Indian general elections is a positive signal for international business and diplomacy. Prime Minister Manmohan Singh has a good chemistry with many world leaders and has aptly stuck to his international commitments in the past - the successful implementation of the Indo-US deal on nuclear power is an example.

The most important aspect of Congress’ re-election has been its much more comfortable position in the new parliament, eliminating the need to seek support from rigid and obstructive communist parties. During the last five years India has moved forward in opening its economy, but the last government’s speed and the level of engagement was restricted due to threats by powerful left-wing allies of necessity. It is ironic that in the middle of an international financial crisis that has seriously dented the reputation of capitalism the Indian communists have suffered their worst electoral defeat in decades.

Instead, Indian voters have given a clear mandate in support of the progressive agenda of Singh’s government that involves economic and financial reforms along with greater integration with the rest of the world. Being one of the most important emerging economies, growing at around 6% in the midst of international slowdown, India has the potential to play an important role in shaping the world economic and political order.  

These elections also set the agenda for the future: 65% of India’s population is under the age of 35 and their approach towards the world is different from those of the older generation of current business and political leaders. Young Indians are much more exposed to the international scene and have little inhibition engaging with other countries, especially United States. Being part of the IT revolution they know the benefits of globalisation.