The wait is finally over: after weeks of voting, after months of campaigning, and after too many strategic decisions were put on hold until after the election, India has a new leader. This result is a highly significant one, heralding much more than just a domestic change of government.
The resounding victory for the opposition BJP has ended the long era of India as a family business, spectacularly displacing the Nehru-Gandhi dynasty, and transferring power to the charismatic and controversial Narendra Modi.
Modi’s campaign electrified the nation, making full use of social and traditional media, as well as a hefty travel budget, to overshadow the ruling party’s candidate, Rahul Gandhi.
For those global companies trading in and with India, and those with local manufacturing, the outcome could prove highly significant. Modi was previously the Chief Minister of Gujarat state, where he toed a ruthlessly pro-business line. Now he’s in a position to do something similar at a national level.
Modi’s to-do list is long, and there are fascinating times ahead for India’s business leaders and international diplomats as the country prepares to reposition itself
As we’ve seen at our Megatrends India conferences, industry leaders have been crying out for someone to take an iron grip of India’s business world and shake out old practices. It’s an opportunity that must not be missed.
At the end of two consecutive five-year terms, stagnation and political indecisiveness have overshadowed industrial progress. Monthly car sales have fallen for the best part of two years, and truck sales, closely linked to business confidence, are a fraction of what they should be based on earlier projections.
Modi’s to-do list is long, and there are fascinating times ahead for India’s business leaders and international diplomats as the country prepares to reposition itself among the BRICS, and rebuild its position in Asia and in the world.
So how will Modi’s election impact the automotive industry? We can begin by taking a quick glance at the key topics that have been raised repeatedly at Megatrends India.
Mining has been on hold for many months now; India sits on vast untapped coal reserves, yet it imports coal. There’s hope that a pro-business government will address the crisis in the mining sector, create jobs and restart the sales of tipper trucks that were hit hard by the mining ban.
Can one man bring customers back into car dealerships, get the truck factories up to capacity, open the mines and build the roads that all these new vehicles will need? Maybe. Or maybe all that was needed was a change
Business leaders want to see the introduction of the long-awaited and almost mythical GST (goods and services tax) which will see products taxed at a national level, instead of by each state. This should enable efficient cross-state transportation and ease the lot of the road freight companies.
And those road freight companies want not only smooth paperwork, but also smooth roads – a new government brings hope of renewed infrastructure development.
That already seems like a hefty workload, and that’s just a selection of issues from one industry sector alone. Can one man bring customers back into car dealerships, get the truck factories up to capacity, open the mines and build the roads that all these new vehicles will need? Maybe. Or maybe all that was needed was a change.
Martin Kahl is Editor, Automotive World.
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