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Modi's tough challenge
Published in The Saudi Gazette on 13 - 04 - 2015


Hussein Shobokshi


India is slowly but surely strengthening its position on the world stage as a major political and economic player. The recent visit by Indian Prime Minister Narendra Modi to France was another step in that direction. He managed to secure a major deal to purchase the latest French military fighters and got a phenomenal deal with Airbus, the giant European aircraft manufacturer to open a factory in India.
On May 16, 2014, the BJP, India's Hindu nationalist party, resoundingly won the country's national election by seizing 282 of the 543 seats in India's lower house of Parliament and crushing the alliance led by the Congress Party. Though the BJP got just 30 percent of the popular vote, in terms of seats it was the biggest victory for a single party in decades. As the longtime chief minister of the prosperous western state of Gujarat, Modi, son of a tea seller and born into a low caste, had already achieved remarkable political success.
Above all, Modi will be judged on his ability to revive the economy which he has repeatedly said is his top priority. From 2005 to 2007, India grew at a rate of over 9 percent year. Now it's about 5 percent, a figure Western countries would love to have but one that is not enough for India, which, given its size, must generate millions of new jobs every year. Retail inflation, at about 8.6 percent, is high and the fiscal deficit wide. While India was vulnerable to the Great Recession in 2008 and 2009, many also blame Congress for inaction and its inability to pass pro-business reforms.
Often fiery and intermittently reasonable, sometimes banal but occasionally innovative, Narendra Modi's statements on foreign policy over the past few years have been so meager and uneven that they cannot readily serve as a guide to how he will act.
Modi's tenure will be defined by how he responds to specific challenges. The first is economic, where everything depends on his ability to boost growth. Besides strengthening India's economic partnerships with the US, Europe and Asia, a stronger economy will give the country the strength it needs to play a larger role on the world stage.
The US is not only one of India's most important trading partners, it also has a large, influential ethnic-Indian population. Each nation needs the other as a counterweight to China and to stave off extremism in Afghanistan and Pakistan. “You can't wish away the United States," says Sanjay Puri, Chairman of the United States India Political Action Committee, based in Washington. “There's a real opportunity now, despite everything, for a reset.”
India matters a great deal and will continue to do so as its success is vital for the global economy.


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