India is currently holding its Lower House general elections and Fitch’s Solutions’ Country Risk team expects Prime Minister Narendra Modi’s National Democratic Alliance, led by the Bharatiya Janata Party (BJP), to win the most number of seats, but fall short of a simple majority in the Lower House.
Under this scenario, Fitch forecasts in its latest industry trend analysis, India's mining sector would see solid growth in the coming years, boosted by the Bharatiya Janata Party's friendly policies towards mining, vast mineral reserves and improving commodity prices.
Policy continuity of Modi's reforms in the mining industry would drive substantial positive changes despite slow implementation, the analysts say. Since coming to power in 2014, the Modi government has enacted a series of liberalising reforms in an attempt to increase foreign investment into the sector.
Modi's re-election would also safeguard the new National Minerals Policy (NMP) approved in March 2019, according to which the government aims to increase the production of major minerals by 200% in seven years.
The possibility of an opposition win by the Indian National Congress poses risks to Fitch’s forecast, as the party has promised to better enforce the Forest Rights Act in their manifesto.
The results of the election will be released May 23.