In the aftermath of the general elections of India, which have been nothing but a thriller, there are questions about how it would impact India-US economic ties. To answer that and more, Mukesh Aghi, President and CEO of US-India Strategic Partnership Forum (USISPF) joined India Today's Executive Editor Geeta Mohan in an exclusive interview.
Here are excerpts from the interview:
How did you wake up to this news?
A: Good to be talking to you. When you look at the election result, you have the Prime Minister's (Narendra Modi) party, BJP, not getting an absolute majority. But I think they will soon form a coalition government and come back. The question is the impact or the interest of international investors in India. I think that does not deplete at all because you have to look at it from a broader perspective. One is that geopolitically, India is in a very strong position vis-a-vis China, and it's an economy that is growing substantially from $4 trillion to $5 trillion by 2027 and then (would) continue to grow. That attracts a lot of companies to come into India and be able to gain the market share of the growing economy.
Two, from a China perspective, US companies are looking at de-risking the supply chain, so that process continues. I think it's important to understand that regardless of who comes to power in India, India will keep on playing a very critical role, both from a market opportunity perspective and also from a geopolitical perspective.
I don't think there's any diminishing of interest. I think more important, what is going to be critical is that the sense of reform continues, a sense of stability continues, a sense of transparency continues. And I think that, regardless of who comes in and drives the agenda, those few items which I mentioned will continue because India is going to play a critical role, a pivotal role, and that process continues.
Having said that, when you woke up and looked at the numbers, did you imagine this could be the result in India?
A: I think after the Ram Mandir there (in Ayodhya, Uttar Pradesh) you had a very strong Modi wave, and everybody expected that the numbers would be much, much higher. We believe that there was a sense of comfort and complacency in the BJP. A lot of people didn't turn out to vote because they felt that the Prime Minister would win anyhow. But that's democracy. You have to adopt and adjust to the changes of the people.
And that's what the US has to learn. Changes that happen in Indian democracy are accepted and people move on. And I think from our perspective, when you look at the strength of Indian democracy, a people's board is critical, people's power is critical. And when you have a coalition government coming in, you will see a much more centrist approach to the domestic agenda.
How do you look at how this result could have an impact on an immediate event? When you talk about the immediate future of the market and the business environment, do you see much of an impact?
A: You have to understand markets tend to have a knee-jerk reaction, and they correct with time itself. (Referring to markets soaring to an all-time high pre-polls and then crashing after the results began coming in) You have to look at it from a large long-term investment in India. That sentiment does not change. That sentiment stays very, very strong because you have to understand that US companies are looking at India not only just as a market, but also as a competitive tool for them to compete globally. For example, we have almost 1,600 global capability centres now in India. The largest number are from US companies itself, and they are able to make almost around $22 billion in exports, in technology, and in services.
I think that does not diminish the importance of India. Also, because the reliance of US companies was on research and development, try to be competitive and continue to grow. So, we will see that momentum absolutely not changing at all. This market will shift, sentiment will change. But overall, in the long term, the boardroom discussion here is that India is pivotal and India is critical. I will keep on investing in every aspect of India itself.
Looking at the strategic aspect, we saw the Quad strengthening. We've seen a lot about the blocs, whether it's economic or otherwise, where the countries have come together and have increased when it comes to strategic cooperation. Where do you see any impact there? Or are you looking at an India where, while there are diverse opinions, the Opposition and the dispensation would certainly come together when it comes to national security and strategic aspects, particularly the Quad, which in fact started during the UPA?
A: We see no impact on the Quad itself because you have to understand, as time goes by, China gets more assertive, much more aggressive, and the stress point in US and China is getting worse in every aspect. You are seeing us stopping a lot of technologies moving to China. US companies are looking at de-risking their supply chain from China and then China has not reduced its borders of forces from the Indian side. So, India has no choice and the US has no choice but to come together with India, Japan and Australia and drive the Quad agenda.
But I think you have to understand the Quad agenda is now moving beyond defence partnership. Now it's moving into economic security. You are looking at Quad driving, secure supply chain of critical minerals, and critical technology itself. I think regardless of whoever comes in, national security is going to be critical for that government. And the Quad plays a pivotal role in supporting India's national interest.
Before I let you go, my final question. This is the biggest democratic process that you see, the biggest democratic exercise in that. We've seen how the country has come together, voted those who were in power as well and those who are in the Opposition. Your reading on what this means for India. For India, within India and for India as to how it represents itself outside of India?
A: You have to give credit to the people of India, to the voters. They're smart, astute voters. They are looking at what's good for the country, what's good for themselves. And they are not swayed by much of social media or any other kind of media.
They are basically keeping their interests in mind when they go to vote locally. And when you have 640 million people voting, which is the largest bloc ever in the history of humankind, what we are seeing is that democracy is working. And I think the rest of the world has to learn from India as to how you conduct elections, how you basically transit power, and how you basically manage the Opposition.
Published On:
Jun 6, 2024
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