India under Narendra Modi is the fifth biggest geopolitical risk of 2020, said Eurasia Group, world’s leading political risk consultancy.
Eurasia’s annual ‘Top 10 Risks’ of the year list is considered one of the foremost geopolitical indicators among global investors, multinational firms and various financial and business consultancies.
“Prime Minister Narendra Modi has spent much of his second term promoting controversial social policies at the expense of an economic agenda. The impacts will be felt in 2020, with intensified communal and sectarian instability, as well as foreign policy and economic setbacks,” reads the Eurasia Group’s report.
The analysis titled ‘India gets Modi-fied’, has been co-authored by the president of Eurasia Group, Ian Bremmer. Bremmer had earlier argued that “Modi is India’s best hope for economic reform” in the May 2019 edition of Time magazine, the same edition in which author Aatish Taseer had wrote a piece called Modi “Divider-in-Chief”.
The consultancy report talks about how since his re-election in May 2019, Modi’s government has adopted a “contentious” social agenda, which not only comes “at the cost” of India’s economy, but also “challenges the secular and democratic foundations” of the republic.
“Modi and his government have been busy in recent months. They revoked the special status for Jammu and Kashmir and implemented a system to identify illegal immigrants in the northeast, stripping 1.9 million people of citizenship,” Bremmer and co-author Cliff Kupchan wrote in the piece.
“The government also passed a law that, for the first time, makes religion a criterion for migrants from neighbouring countries to formally acquire Indian citizenship,” the authors say. The report says that Home Minister Amit Shah is responsible for this radical policy shift. “Behind these moves is Amit Shah, the former (sic) head of Modi’s Bharatiya Janata Party (BJP), now home minister,” it says.
The authors note that protests have “spread around India”, due to citizens’ fear of India losing its “secular identity”. But regardless of growing protests, “Modi will not back down”, they maintain.
Bremmer and Kupchan say that the Modi government’s social agenda will also have “harmful effects for India’s foreign policy”. “Its actions on human rights will be under closer scrutiny by many nations, and its reputation will take a hit,” they say, adding that changing attitudes in the US Congress towards India are likely to further impede US-India ties.
“An empowered RSS means that Modi has less room to manoeuvre on structural reforms, just as the economy is starting to sputter, with quarterly growth falling to a six-year low of 4.5 per cent and forward-looking indicators looking softer still,” it says.
“The RSS influence was evident in Modi’s decision to drop out of the Regional Comprehensive Economic Partnership negotiations last year and will be a big reason why India is unlikely to rejoin in 2020,” reads the report.
Report by Eurasia ends by stating that a weakened economy “will in turn feed further economic nationalism and protectionism, weighing on India’s troubled course in 2020”.
The top three risks on the list are increasingly unstable US domestic politics under President Donald Trump, “decoupling” of US and China in the technology sphere, and hostile US-China relations.