10.1 The 2024 General Election: Forming a Coalition Government and a Third Term

On the afternoon of June 4, 2024, at the BJP headquarters in New Delhi, the atmosphere grew heavier with every vote count update on the large electronic screen. 240. The number stopped there. Where had the confidence gone—the confidence Prime Minister Modi himself had displayed in Parliament when he guaranteed that the "BJP alone would surpass 370 seats, and the NDA would exceed 400"? With only 240 seats, falling 32 short of the 272-seat majority, it was a number the Bharatiya Janata Party (BJP) had not experienced in the past decade.

The election itself was an unprecedented exercise in democracy in human history. There were 970 million registered voters and 1.05 million polling stations. Across seven phases over 44 days, from April 19 to June 1, 642 million people cast their ballots. Electronic Voting Machines (EVMs) were carried on the backs of elephants to mountain villages 4,000 meters above sea level in the Himalayas, and camels transported voting equipment across the Rajasthan desert. For comparison, it was as if the entire population of South Korea took turns voting for a month and a half.

The pre-election mood was overwhelming. The success of the G20 summit as the host nation, the landing of Chandrayaan-3 on the lunar south pole, and high-speed growth in the 7–8% range—Modi’s image of a 'Strong India' was at its peak. "Abki Baar 400 Paar" (Over 400 seats this time). The election slogan was an expression of confidence that they would even reach the threshold required for constitutional amendment. Exit polls also unanimously predicted a landslide victory for the BJP.

However, as the ballot boxes were opened, a twist unfolded.

The epicenter of the shock was Ayodhya. In the Faizabad constituency—the heart of Hindu nationalism and home to the Ram Mandir, where Modi himself presided over the consecration ceremony in January 2024—the BJP candidate lost. In the very city where a 30-year aspiration of the Hindutva movement had been realized, voters turned their backs (see Chapter 5, Section 5.1). The situation was even more dire across the entire state of Uttar Pradesh. Out of 80 seats, the BJP took only 33, a sharp drop from the 62 seats it swept in 2019. In its place, the opposition Samajwadi Party (SP) made significant gains, securing 37 seats.

What weakened the potency of the 'Modi Magic'?

Experts point to the suffering of the common people hidden behind brilliant macroeconomic indicators. A Congressional Research Service (CRS) report analyzed that "widespread poverty, high youth unemployment, and inflation frustrated the BJP's electoral ambitions." In a pre-election opinion poll, 27% of respondents cited 'unemployment' as their top concern. While the 8.2% GDP growth was felt in the skyscrapers of Mumbai and the IT campuses of Bangalore, it was a distant story for a young person in rural Bihar.

The strong performance of the opposition alliance, the 'INDIA' (Indian National Developmental Inclusive Alliance) bloc, was a decisive factor. The Congress party, led by Rahul Gandhi, nearly doubled its seats from 52 to 99, and the INDIA bloc as a whole secured 234 seats. The narrative pushed by Rahul Gandhi—that "if the BJP exceeds 400 seats, they will rewrite the Constitution"—proved more powerful than expected. Fear spread among Dalit and Other Backward Class (OBC) voters that "my reservation quotas could disappear." The quotas guaranteed by the Constitution are almost the only ladder for Dalits and OBCs to access education and public office. Faced with the fear that this ladder might be shaken, the emotional resonance of the Ram Mandir lost its power.

Ultimately, Modi had to join hands with regional parties. The Telugu Desam Party (TDP) led by Chandrababu Naidu in Andhra Pradesh with 16 seats, and the Janata Dal (United) (JD-U) led by Nitish Kumar in Bihar with 12 seats, became the 'kingmakers.' While the NDA (National Democratic Alliance) narrowly surpassed the majority with a total of 293 seats, this was a victory of a different nature compared to the 336 seats in 2014 or 353 seats in 2019.

On June 9, Modi took his third oath of office at the Rashtrapati Bhavan, the presidential palace. This was the first time since India's first Prime Minister, Jawaharlal Nehru, achieved it in 1962—62 years ago—that a leader had secured a third consecutive term. It is undoubtedly a historic record. However, the status of the 'Imperial Prime Minister' enjoyed over the last 10 years has ended. Now, he has become a 'coordinator' who must compromise with coalition partners and accommodate their regional demands—fiscal allocation, infrastructure investment, jobs, and the expansion of state powers.

To compare it to Korean politics, it is similar to transitioning from a presidency of unilateral administration to one of cooperation with an opposition-controlled legislature. The speed of pushing through policies may slow down, but the durability of policies reached through consensus could increase. The question is whether that consensus will move in a direction that improves 'policy quality' or devolves into the 'distribution of spoils.' The starting line for Modi 3.0 was placed right on top of this dilemma.

After taking office, Modi told party members that he recognized the "Tees" (pain) of the people and would work harder to alleviate it. It was a lesson taught by a victory that was not a landslide. What the politician from a chaiwala background faced as he began his third term at the age of 74 was not the pinnacle of power, but the redefinition of power.

10.2 Modi 3.0 Reforms: Consolidation of Labor Laws, GST Reform, FTA Agreements, and the World's 4th Largest Economy

Even under the new political conditions of a coalition government, the engine of economic reform for Modi 3.0 did not stop. Rather, the challenge of the 'suffering of the common people' revealed in the election accelerated the pace of reform. In his 2025 Independence Day speech, Modi announced the formation of a "Task Force for Next-Generation Reforms," declaring that "reform is not forced upon us; it is our conviction." The first test of that conviction was the labor laws.

India's labor laws were in a state well-deserving of the nickname 'regulatory jungle.' There were 29 central government laws alone, and when combined with state government regulations, hundreds were intertwined. Laws added over different eras since independence in 1947 often contradicted each other, or multiple laws regulated the same issue redundantly. To put it in a Korean context, imagine if there were 20 versions each of the Labor Standards Act, the Act on the Protection of Dispatched Workers, the Occupational Safety and Health Act, and the Employment Insurance Act. For companies, the cost of compliance increased exponentially with more hiring, discouraging recruitment. For workers, an ironic situation occurred where gig workers and platform workers, who actually needed protection, fell into legal blind spots.

The Modi government pursued the task of consolidating these complex laws into four Labor Codes: the Code on Wages, the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions Code (OSH). While the bills had already passed Parliament during the second term, their actual implementation had been continuously delayed due to political considerations, opposition from labor unions, and the lukewarm attitude of state governments. The third-term government prepared to push through this task. The gist is to expand pension (PF) and insurance (ESI) benefits to gig and platform workers, allow night shifts for women, and transparently simplify corporate hiring and firing procedures.

Why is this important? Because for India to replace China as the 'world's factory,' an institutional environment that allows global companies to undertake large-scale hiring is essential. Samsung Electronics building the world's largest smartphone factory in Noida and Hyundai Motor producing 800,000 units annually in Chennai are examples that show the potential of Indian manufacturing, but the rigidity of labor laws remains a stumbling block for foreign companies deciding on investment.

The second axis is the refinement of the GST (Goods and Services Tax) system. The GST, introduced in 2017 under the banner of "One Nation, One Tax," was a historic achievement that unified India into a single market (see Chapter 4, Section 4.4). By unifying indirect taxes that varied by state, it sped up the flow of logistics and expanded the tax base. However, the still complex tax rate brackets (0%, 5%, 12%, 18%, 28%) and frequent regulation changes were a burden to businesses. The Modi 3.0 government pursued a reorganization aimed at significantly reducing these rate brackets to just two: 5% and 18%. They announced tax cut policies to lower rates on daily consumer goods and medicines, and to lower or exempt rates on small cars, health insurance, and life insurance. They also implemented a tax exemption for income below 1.2 million rupees (approx. 19 million KRW, 12 lakh rupees). This is a move to increase the disposable income of the middle class and stimulate consumption.

The third axis is the expansion of the Free Trade Agreement (FTA) network. The Modi government has walked a tightrope between protectionism and strategic opening. While withdrawing from the Regional Comprehensive Economic Partnership (RCEP) at the last minute in 2019 was a choice to protect domestic industries, they moved aggressively in bilateral agreements. Following the Comprehensive Economic Partnership Agreement with the UAE (CEPA, effective May 2022) and the Economic Cooperation and Trade Agreement with Australia (ECTA, effective December 2022), they signed the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA: Switzerland, Norway, Iceland, Liechtenstein) in March 2024 and brought it into effect in October 2025. The EFTA side promised an investment of $100 billion in India over 15 years. The conclusion of a Comprehensive Economic and Trade Agreement (CETA) with the UK was also reached, and FTA negotiations with the EU entered the final stages.

The goal of all these reforms converges into a single number: the world's 4th largest economy. According to the IMF's April 2025 World Economic Outlook, India's nominal GDP reached $4.187 trillion, narrowly overtaking Japan ($4.186 trillion). An economy that was 10th in the world when Modi took office in 2014 rose to 4th in just 11 years—the fourth spot after the US, China, and Germany. Per capita GDP also doubled during the same period from $1,438 to $2,880.

However, more important than the ranking itself is the quality of the industry supporting it. If GDP growth of around 6% is driven mainly by the service sector and capital-intensive plant industries, and manufacturing fails to absorb enough employment, India risks remaining only as a 'large domestic market of a large country.' The numbers have gone up. Whether the lives of the people living within those numbers have also improved is a different matter.

10.3 Viksit Bharat 2047: The Vision of Entering the Developed World by the 100th Anniversary of Independence

2047. This is the year that marks exactly 100 years since India gained independence from Britain. Narendra Modi has set a massive slogan for this year: Viksit Bharat. 'Developed India,' or India as a developed nation. He named the 25 years from the present to 2047 as 'Amrit Kaal' (the Age of Nectar, or the Golden Age), declaring that during this period, India will shed its shell as a developing nation and leap forward to become a developed country.

The target figures are ambitious: a GDP of $30–40 trillion, per capita income of $15,000–18,000, a poverty rate below 5%, life expectancy over 80 years, and a literacy rate of 100%. Given that India's current per capita income is approximately $2,880, it calculates to a five- to sixfold increase within 22 years. This is a goal achievable only by maintaining an average annual real growth of 7–10% for 22 years. It essentially requires a pace similar to the 'Miracle on the Han River' achieved by South Korea, which grew at an average of 8–9% annually for 30 years from the 1960s to the 1990s. However, South Korea had a population of 30 to 40 million at the time; India has 1.4 billion.

As the spiritual foundation of this vision, Modi presented the 'Five Resolves' (Panch Pran). First, the firm goal of leaping into a developed nation. Second, the complete removal of a colonial mindset. Third, pride in cultural heritage. Fourth, national unity and solidarity. Fifth, the fulfillment of civic duties. This is a comprehensive project that includes not just economic figures but the re-establishment of national identity. Using a nameplate that read 'Bharat,' an ancient Sanskrit name for the country, instead of 'India' at the G20 summit was a symbolic expression of this will.

The physical foundation of the vision is infrastructure. The national infrastructure master plan known as 'Gati Shakti' is a concept to drastically lower logistics costs by integrating road, rail, port, airport, and telecommunications construction plans into a single digital platform. By connecting the infrastructure projects of 16 central ministries and state governments based on GIS, they aim to eliminate inefficiencies, such as digging up a road to lay gas pipes just a month after it was paved. Over the past 10 years, Modi has doubled the speed of highway construction, modernized dilapidated railways, and doubled the number of airports from 74 to 149. The blueprint for 2047 includes a high-speed rail running between Mumbai and Delhi and smart cities connected by digital networks.

The core driver is the population. In 2023, India overtook China to become the world's most populous nation. The average age is 28. While the rest of the world suffers from aging populations, India is the only massive economy capable of supplying an abundant young workforce for the next 30 years. To maximize this 'Demographic Dividend,' Modi placed youth at the center of the vision. He announced a 1-trillion-rupee (approx. $16 billion) employment plan called 'PM Viksit Bharat Rozgar Yojana' and promised to provide job support funds to 30 million young people. Reforming education policy (NEP 2020) to strengthen education in future technologies such as coding, AI, and robotics, and revitalizing the startup ecosystem through 'Startup India' are also part of the youth strategy.

Energy and space are the two wings of the vision. In his 2025 Independence Day speech, Modi declared that nuclear power capacity would be increased tenfold by 2047, and the construction of 10 new reactors is underway. He announced that the 2030 goal of a 50% share of non-fossil fuel energy was achieved early in 2025, taking on global leadership in the fields of green hydrogen and solar power. In the space sector, they have planned the construction of an independent space station, 'Bharatiya Antariksh Station,' and are pushing the 'Gaganyaan' manned spacecraft program (see Chapter 6, Section 6.4). More than 300 space startups have jumped into satellite technology and space exploration innovation. The door opened by the successful landing of Chandrayaan-3 on the lunar south pole in 2023 is expanding into the private sector.

The reason this vision is politically useful is clear: there is no better tool than long-term goals for "justifying today's pain with tomorrow's greatness." Just as South Korea's 'entry into the developed world' was achieved through the accumulation of specific industrial policies and education investments over decades, Viksit Bharat must be broken down into measurable intermediate goals to avoid remaining just a slogan. Manufacturing employment rates, educational achievement, the level of administrative digitalization, and climate adaptation capabilities—if these do not follow in numbers, Viksit Bharat could turn from a vision into empty talk as 2047 approaches.

Modi appeals to the people: "We do not want incremental change; we want a quantum jump." Whether that jump can carry all 1.4 billion people is something no one knows yet.

10.4 Remaining Challenges: Deepening Inequality, Youth Unemployment, Manufacturing Stagnation, and Democratic Backsliding

Behind the brilliant numbers, there are always shadows. The shadows of India in the Modi era have four names.

First, inequality. India's economic growth is 'K-shaped.' There are those who go up along the upper stroke of the K. Conglomerates like Adani and Ambani have accumulated astronomical wealth by dominating core national infrastructure such as ports, airports, energy, and telecommunications (see Chapter 5, Section 5.4). Their world is a market where consumption of premium SUVs, luxury apartments, and luxury goods is exploding. And then there are those who go down along the lower stroke of the K. Agricultural laborers in rural Bihar working for 200 rupees (approx. 3,200 KRW) a day, or families of daily laborers living in cramped rooms in the Dharavi slum of Mumbai. According to an Oxfam report, the top 1% in India owns more than 40% of the total national wealth. The reality that the Modi government must distribute free food grains to over 800 million people paradoxically shows how unequal that growth is. The free food program is evidence of good governance, but at the same time, it is a confession that 800 million people cannot feed themselves.

Second, youth unemployment. This is the most painful of the four challenges. As of 2025, the unemployment rate for young people aged 15–29 in India is approximately 14.9%. For young women, it reaches 16.3%, and the youth unemployment rate for women in the state of Kerala is as high as 44%. A paradoxical situation is occurring where it is more difficult to find jobs as education levels increase. "Graduated from university but no job." The scene of tens of thousands of master's and doctoral degree holders flocking to apply for 10,000 low-level civil service positions has become a daily occurrence in India.

South Korea also has a serious youth unemployment problem, but the scale in India is on a different level. Every year, 12 million young people pour into the labor market. This means a number equivalent to a quarter of the entire South Korean population goes looking for jobs every year. While the 'Demographic Dividend' is the pride of the Modi government, dividends are not paid automatically. If education and skills training do not match industrial demand, the demographic dividend turns into a 'Demographic Disaster.' A decisive reason why the ruling party struggled in the 2024 general election was the anger of these young people.

Third, manufacturing stagnation. Modi shouted "Make in India" and publicly declared he would raise manufacturing's share of GDP to 25%. The reality has moved in the opposite direction. Manufacturing's contribution to GDP actually fell from about 17% in 2014 to the 13–15% level. While it is true that global companies like Samsung, Hyundai, and Apple's partner Foxconn have set up factories in India, there were limits to their investment leading to large-scale employment. This is due to automation and technology-intensive production methods. The Lowy Institute points out that "India's GDP growth has been driven mainly by the service sector and capital-intensive industries with low employment elasticity." Foreign Direct Investment (FDI) also did not flow in as much as expected. According to the Reserve Bank of India's (RBI) own data, the FDI-to-GDP ratio plummeted from 1.7% in 2016 to the 0.5% range.

The reasons why India has failed to become the 'world's factory' are not simple. Lack of infrastructure, difficulty in land acquisition, instability of power and water, complex bureaucracy, and unpredictable tax administration—these are all simultaneous equations that must be solved together. The fact that more than 40% of India's total workforce is still engaged in low-income agriculture shows how delayed the structural transition from agriculture to manufacturing is.

Fourth, democratic backsliding. This problem cannot be measured by economic indicators, but it could leave the deepest mark of the four challenges in the long run. Freedom House, in its 2025 report, classified India as a 'Partly Free' country and recorded that its score had fallen from the previous year. The V-Dem Institute classifies India as an 'Electoral Autocracy' (see Chapter 5, Section 5.3). Tax audits of critical journalists, the mobilization of investigative agencies against opposition leaders, and exclusionary policies and hate speech against the Muslim minority are noted. The government-friendly transformation of mainstream media has reached a point where the term 'Godi Media' (lapdog media) has emerged.

The Citizenship Amendment Act (CAA), the stripping of Kashmir's autonomy (abrogation of Article 370), and the construction of the Ayodhya Ram Mandir—these three are core agendas of Hindu nationalism and, at the same time, policies that have deepened religious divisions in Indian society. Whether a society where more than 200 million Muslims out of a population of 1.4 billion feel alienated can move forward as a unified nation is a key variable determining India's future. Out of the 543 members of the Lok Sabha elected in the 2024 general election, only 24 were Muslim, and not a single one was part of the NDA. The reality that Muslims, who make up 14% of the Indian population, do not even fill 5% of the seats in the lower house speaks to a crisis of representation in numbers.

India in the Modi era has shown remarkable achievements in speed and scale. However, whether that speed carried everyone, and whether that scale reached everyone, is a different matter. In a society where the fruits of growth are not shared evenly, growth eventually becomes fuel for instability.

10.5 Implications for Korean Readers: Strategic Value and Risks of a 1.4 Billion-Strong Partner

For Korean readers of this book, what kind of country should India be? It is neither a 'rosy land of opportunity' nor a 'desperate land of chaos.' India is a country where opportunities and risks grow at the same pace.

Let's first look at the strategic value. As the US-China hegemony competition intensifies, a 'China plus One' strategy has become a necessity, not an option, for Korean companies. If the supply chain concentrated in China must be diversified, there is no country on Earth that can replace India, with its 1.4 billion people, a massive domestic market, and a young average age of 28. Vietnam has a population of 100 million and Indonesia 270 million; they do not compare to India in scale.

Korean companies are already achieving meaningful results in India (see Chapter 8). Hyundai Motor's 2024 IPO, the largest in the history of the Indian stock market, Samsung Electronics' world-largest smartphone factory in Noida, and the deployment of the K-9 self-propelled howitzer 'Vajra' in the Indian Army are results of the trust Korean companies have built in the Indian market. The Modi government's PLI (Production Linked Incentive) scheme provides new opportunities for Korean companies in high-tech fields such as semiconductors, electric vehicles, and batteries.

South Korea's manufacturing technology and hardware capabilities and India's software design abilities and abundant workforce are in a complementary relationship. South Korea's population is shrinking, while India's is overflowing. South Korea has the technology but a small market; India has the market but a weak technological base. It is a structure where the puzzle pieces fit together.

Diplomatically, India shares a strangely similar dilemma with South Korea (see Chapter 7). A diplomacy of 'strategic autonomy' where it is a core partner of the US but cannot completely sever ties with Russia and China. A double-edged stance of participating in the Quad while also being a member of BRICS. Just as South Korea walks a tightrope between the US and China, India faces similar concerns. This common dilemma can be a leverage for both countries to expand each other's diplomatic space.

New variables have also emerged. The terror attack in Pahalgam, Kashmir, in April 2025 and the subsequent escalation of military tension between India and Pakistan served as a reminder that India's economic growth narrative can be interrupted by a security crisis at any time. Both India and Pakistan are nuclear-armed states. Security instability in this region is an item that cannot be omitted from the risk assessment for Korean corporate investment in India.

However, we must face the risks.

India is also a place where many global companies have failed and withdrawn, earning it the moniker 'graveyard of global companies.' The wall that Korean companies hit on the ground is unpredictable administration. Cases close to 'tax terrorism' are reported, where promised incentives are retroactively canceled or massive taxes are imposed due to arbitrary legal interpretations. Basic infrastructure issues like unstable power supply, water shortages, and poor road conditions also persist. Different legal systems for each state, complex land acquisition procedures, and bureaucratic licensing processes remain. While the Modi government claims to have reduced 'red tape,' the temperature felt on the ground is still cold. When the 'Atmanirbhar Bharat' (Self-Reliant India) policy operates as import regulations and strengthened tariff barriers, it can become a headwind for the export-oriented Korean economy.

Then, what kind of relationship should South Korea design with India?

A shift in perception is needed, recognizing India not as an 'export market' but as a 'long-term partner for growing together.' If you enter with expectations of short-term profits, you will be disappointed. An 'India-specific strategy' that deeply understands India's institutions, culture, and labor environment must come first. At the government level, negotiations to improve the CEPA (Comprehensive Economic Partnership Agreement) should be accelerated, and diplomatic support should be strengthened so that Korean companies can take root in a fair environment in India. At the corporate level, we must design 'co-existence' with local society beyond just 'localization.' A corporate citizen who contributes to the region's education, hygiene, and environmental issues, rather than just building a factory and leaving, will determine brand trust.

Prime Minister Modi has shown special affection for South Korea, considering it an "economic development role model." He is the person who said, "I will make Gujarat like South Korea," during his time as Chief Minister of Gujarat. South Korea was the country that caught the eye of the boy who sold chai as he pondered ways to escape poverty. While this friendly atmosphere should be utilized as an asset, it must be backed by a cool-headed strategy that does not rely on emotion.

In 2047, the 100th anniversary of independence, what will India look like? Will it be a developed nation with a $30 trillion economy as Modi dreams, or will it remain a land of massive contradictions suffering from the wealth gap and religious conflict? Probably both. India has always been that way—a country where dazzling achievements and deep-rooted contradictions coexist in one body. What is important for South Korea is the wisdom to understand that complexity as it is and find points of mutual interest within it.

To walk alongside a giant elephant, one needs the patience to understand the elephant's stride and habits and keep pace. Growing together with 1.4 billion partners will be one of the keys determining the next 30 years of the South Korean economy.