Despite India’s record economic growth under Narendra Modi’s decade-long leadership, his BJP lost its parliamentary majority in this year’s election due to persistent unemployment. Now leading a fragile coalition, Modi 3.0 must steer clear from short-term job creation incentives and instead focusing on addressing key structural issues of the Indian economy — namely, the lack of labor-intensive industries such as manufacturing. Despite its strategic location amidst supply chain diversification and the US-China rivalry, New Delhi has lagged behind regional peers in attracting global capital to grow its industrial base. By committing to deep-seated reforms, Modi can help India better realize its potential as the world’s next factory and translate its growing economy and global stature into the jobs Indians want.

Published on the East Asia Forum on September 11, 2024.