On Sunday night, India’s new National Democratic Alliance (NDA) government was sworn into office, with Prime Minister Narendra Modi at its helm once more.

We have a new group of Bharatiya Janata Party (BJP) allies, a new group of ministers, and a new look in terms of how the Modi government will function in its third term. However, the economic challenges the new government faces are quite old.

Many experts believe that concerns about inflation, jobs, and lack of upward mobility dented the BJP’s electoral prospects in the recent general election. To talk about the Indian economy and the steps the new government must take, Milan is joined on the show this week by Trinh Nguyen.

Trinh is a senior economist covering emerging Asia at Natixis, based in Hong Kong, where she surveys economic trends across Asia, including in India. She previously worked at HSBC as an ASEAN economist from 2011 to 2015. She is also a nonresident scholar in the Asia Program at the Carnegie Endowment for International Peace.

Trinh and Milan discuss the market reaction to the surprise 2024 election result, the key vulnerabilities for the Indian economy, and how India is performing relative to its Asian peers. Plus, the two discuss India’s ability to leverage the “China+1” moment, the recent slump in foreign direct investment (FDI), and whether coalition government spells doom for reforms.

Episode notes:

1. “Political Earthquakes: Key 2024 Elections in Emerging Markets and What it Means for Growth and Reforms,” Natixis, June 4, 2024.
2. Trinh Nguyen, Kelly Wang, and Diana Zhao, “Lower current account deficit shields India from external shocks and future success hinges on sustaining it,” Natixis, May 29, 2024.
3. Trinh Nyugen and Kelly Wang, “Modi Drove Growth with Public Investment, Supported by Higher Fiscal Revenue; Foreign Inflows Should Help with Funding Pressure,” Natixis, April 12, 2024.
4. Trinh Nguyen and Kelly Wang, “India's Womenomics? Modi’s Decade of Formalisation of Jobs Marches Forward,” Natixis, March 8, 2024.
5. “How India's Economy Can Break the Mold (with Rohit Lamba),” Grand Tamasha, May 15, 2024.
6. “The Great Indian Poverty—and Inequality—​Debate (with Maitreesh Ghatak),” Grand Tamasha, April 24, 2024.
7. “Decoding the Indian Economy (with Pranjul Bhandari),” Grand Tamasha, April 3, 2024.