Expert Speak India Matters
Published on May 27, 2019
In a constantly-evolving discourse and a politically and economically disruptive world, new ideas will demand a greater control over Modi’s actions.
Six headwinds Modi will face in Season 2

Now that the new government under Narendra Modi has been elected and will take oath on 30 May, here are six headwinds that it will face over the next five years. Most of these are a work-in-progress, and are neutral to the texture of governments — the disruptive state of world affairs, from economic policy to foreign policy, for instance. Some, like allegations of institutional breakdown, are domestic and will get accentuated. Others, such as a toxic political discourse, may die of overextended exhaustion. But all will rear their heads, create dissonance, and build hurdles. In Modi Season 2, each of these six headwinds will be an episode that will last his entire tenure.

1. Unpredictable global economy

To expect that the US-China trade war will not impact the Indian economy is wishful thinking. Together, they command close to two-fifths of the $80 trillion world GDP. Irrespective of which side of this war nations stand, and whichever way they lean, all will be hurt in the short term. When these two global engines of growth slow down, the rest of the world will be adversely affected too. Growth rates across the world, including the world’s fastest-growing large economy India, will fall. No surprises there. Political realignments will influence these slowdowns. Both the US and China will seek to rework interests around the economy. The US is powering its trade war with the threat of a real war with Iran, which will curb economic enthusiasm the world over. China will attempt to seek out new markets, of which India is one of the largest. On its part, India too will need to make hard choices, both internationally as well as domestically. The economic landscape ahead is full of road bumps. Negotiating this headwind will be Modi’s first challenge.

2. Chinese encirclement

As it seeks to dominate the region, with India the last stand of democracies, China’s encirclement of India, from Pakistan and Bangladesh to Myanmar and Thailand will continue. Somewhere, Sri Lanka, Nepal and Maldives will create spaces for tension between Asia’s two powers — the fact that Modi is reportedly planning to visit Maldives first, could cushion the tensions somewhat. Given the pressure from the West, the strategic ball is in China’s court — how it behaves with India will determine how India reacts and builds relationships with the US and the EU in the West, and Japan, South Korea and Australia in the East. China has created strategic tensions with all its neighbours, and so, there is an opening for India to engage more deeply with ASEAN nations. As Xi Jinping’s Belt and Road Initiative faces resistance, one democracy after another, China will need to back off from its aggressive stance and readjust. In his welcome note to Modi, Xi said hoped to take the India-China ties to new heights. On his part, Modi will need to be ready with a fresh approach to China, while demanding that China dehyphenate itself from the terrorist state of Pakistan.

3. Oil price uncertainty

Expectations about US President Donald Trump extending exemptions on oil purchases to India ended with the US designation of Masood Azhar as a global terrorist. In a straight-forward transactive stance, Trump has made the US position clear: Azhar for Iran. Given the depth of India’s relationship with the US — economic, diasporic, remittances, defence — a pause in oil purchase from Iran is foregone conclusion. Trump’s message to Modi, saying “great things are in store for the US-India partnership,” need to be supported by actions over the next five years. That said, the price of oil is expected to rise, following the end of supply pipelines from Iran. How long will the US sanctions on Iran continue for, or more importantly, how high will the oil prices rise as a result, are questions that will dog the Modi government. In Season 1, Modi benefited from low oil prices; in Season 2, he will need to brace up for rising prices. Managing these high prices, without hurting the consumer or the economy, will be the big challenge for the new government. Persuading states and placing fuels under GST and a consequent cut in prices could be an option.

4. Pakistan’s terror factories may restart production, a coup is not impossible

Unless, the sun starts to rise from the North, we have little confidence that the deep state of Pakistan will reform its stance on terror. Thus, Pakistani Prime Minister Imran Khan’s message congratulating Modi and working with him for “peace, progress and prosperity” rings hollow — only visible and verifiable actions against Pakistani terror can salvage his words. Seven decades after creating, nourishing and using terror as a state policy not merely against India but across the world, even if Pakistan decides to return to civilisation, it will take time. Pakistan’s terror is really a story of two proxies. First, this rogue nation using terror as state policy and waging a proxy war. And second, China hyphenating itself with Pakistan on terror and keeping India unsteady. Pakistan’s impending economic implosion following the harsh IMF conditions for a pathetic $6 billion bailout will express itself politically through terror. It is a different matter that this time India and her people are better prepared and Pakistan’s nuclear bluff has been called out in Balakot. But we should not underestimate the terror resolve of this failing state. Further, there is a risk of the collapse of the civilian government through another military coup. Modi needs to be ready for this.

5. Toxic political discourse will continue

Whatever the new government now does, howsoever useful it be, the toxicity of political discourse is here to stay. We have seen manipulation of facts, events and incidents turned into headlines over the past five years. There is no way that those narratives — led by a media that, with an exaggerated sense of self-importance, sees itself in the role of the Opposition — will end with Verdict 2019. In his speech to newly-elected NDA Members of Parliament on 25 May alerted them from not merely the allegations that will come their way but equally a pliant and motivated media that will lend complicit support. Modi will be blamed for every death, every change in policy will be turned into an apocalypse, every speech will be converted into a venomous tirade, and every silly statement or act by any of his 303 MPs. There is little that can be done to minds that have been captured by ideologies. Change, if any, will come from politics. From the new government’s side by not allowing the discourse to be lowered, either by functionaries or by followers. And from the Opposition’s side by building a narrative that is positive in direction, nationalist in essence, and India in soul. What we can forecast with a greater certainty, and in tune with and extension of the trends seen in Season 1, Modi in Season 2 will consolidate and strengthen his control over national conversations.

6. Allegations of institutional destruction to continue

From the Comptroller General of India and the Election Commission of India to the Central Bureau of Investigation, Centre-State relations and the Reserve Bank of India, the past five years have seen every discussion, difference of opinion or discord between the government and institutional pillars of India’s democracy come under the allegation that Modi has destroyed them. These allegations have found their way to the highest judiciary, the Supreme Court. Easy as these allegations are to make, impossible they are to prove or stand in a court of law. But the raging discourse around them creates a sense that every action of the Modi government was made to destroy institutional independence. Unless the political narrative changes to one that offers a better alternative, these allegations will continue. But since the political credibility of these barbs has been dismissed by the people, perhaps they have outlived their utility. While the people are not taking them seriously anymore, the noise created will reverberate in echo chambers of social media and WhatsApp groups.

Other than these six, new headwinds will raise their heads. In a constantly-evolving discourse and a politically and economically disruptive world, new ideas will demand a greater control over Modi’s actions. Jobs and growth, independence and accountability, temples and mosques, caste and religion, aspirations and status quo.. all will be minor episodes in the forthcoming Season 2 of the Modi government.

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.


Gautam Chikermane

Gautam Chikermane

Gautam Chikermane is a Vice President at ORF. His areas of research are economics, politics and foreign policy. A Jefferson Fellow (Fall 2001) at the East-West ...

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Guillermina French

Guillermina French

Guillermina French Fundacin Ambiente y Recursos Naturales (FARN)

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