By Utkarsh Singh

The Bhartiya Janata Party (BJP), led by Mr. Narendra Modi, has finally got a well deserved and coveted position in the office, winning its first ever absolute majority and ending the impasse the country has been in under the former party UPA by defeating them down to just 44 of 543 seats in the lower house. Although the struggling economic condition in India was the focus of the campaign, Modi’s victory insinuates a significant change ahead for India’s foreign policy as well. To summarize, a period of corruption and pusillanimity, under the Congress-led United Progressive Alliance (UPA) has ended.

Although the internal challenges the government would be facing are uncountable, the party will be looking to address external challenges as well. In 2004, the UPA did its best to undone the task the previous BJP government had achieved done in the field of positive national-security and foreign-policy position.

For example, the Communist-led Left Front, part of the UPA, prevented the implementation of the civil nuclear deal with United States, and consistently disapproved the creation of a balanced nuclear-liability bill. Indeed, that bill is still languishing – which I hope Modi will consider very soon.

The main challenge lying ahead of the PMO is to create a strict foreign-policy agenda with the help of all the resources and capitals available to him which would be a gruelling task.

Modi biggest challenge will be to revive an economy that has been trapped in its worst slowdown since the 1980s due to issues such as increasing inflation and interest rates. Public finances are in extreme straits as government spending has outpaced revenues. The elected government will immediately need to take a decision on slashing subsidies spending, which is threatening a budget explosion. Similarly, the new prime minister has his work cut out to break Asia’s third-largest economy out of chronic inflation, which drove the central bank to keep interest rates high even as possible.

India’s international prominence is based largely on its economic potential. Among India’s top priorities should be measures to strengthen its relationships in its immediate neighbourhood. Modi has already highlighted the urgency of making the South Asian Association for Regional Cooperation (SAARC) a “living body,” instead of the sluggish group that it was under Congress.

To this end, the relevant parties must abandon the usual sabre rattling, and implement socialism. This logic likely made Modi’s decision to invite SAARC leaders to his swearing in as Prime Minister. To build on this, Modi should work to foster person-to-person connections. The leaders of Pakistan and other neighbours attended Modi’s swearing-in ceremony, which signalled his aspirations to be a regional leader who could improve relations with surrounding countries. But Modi’s action on whether to hold talks with Pakistan is not yet clear. The BJP has long supported a tough stance on Pakistan and opposed the last prime minister’s attempts at talks. Modi will also face challenges in Afghanistan, whose security forces are preparing to take over from troops in the fight against a Taliban insurgency.

Further, Modi will need to reinvigorate India’s relationship with China and the United States. Relationship between the two largest democracies has cooled due to trade disputes and the arrest of an Indian diplomat in New York.

The new federal government will need to mend frayed ties with state governments. A fear of losing economical powers forced some states to delay the rollout of a nationwide goods and services tax (GST), which economist estimate would have boosted India’s economic growth by as much as 2 percentage points. Opposition from states blocked a plan of the previous government to counter terrorism.

Modi needs to act fast as states are most responsible for a revival in capital investments, which barely grew last fiscal year as delays in clearances grounded many infrastructure projects.

Modi undoubtedly faces major foreign-policy challenges. But, with a confident vision and credibility-enhancing policies, his work will be always commendable and has a rare opportunity to put India firmly on the path toward peace and prosperity. The challenge is how India rebuild the imagination of democracy beyond Narendra Modi and the dullness of the Congress.

Born in Varanasi and brought up in different parts of the country, Utkarsh has developed great understanding about the culture and problems the country has been trapped in. Utkarsh believes in bringing change in every sphere possible by influencing the minds of the countrymen through his writing. A great debater, spokesperson and an intellectual writer, who is right now pursuing BTech in Computer Science love making sentences as sharp as Valyrian steel and can’t get enough of singing and running. He could be contacted at +91-8603520212 / utkbits2k11@gmail.com. Want to learn more about him? Just ask he is an open book ( which is another way of saying things have been moving too fast for him to keep his resume updated ).

Posted by The Indian Economist | For the Curious Mind