Ananth Krishnan | Edited by Kritika Bansal

If BJP wins in Gujarat election it will be “an issue of deep concern to China because of its increasing economic interaction with India.”

The Gujarat election is being seen in China as “a litmus test” for how the Indian public sees Prime Minister Narendra Modi’s reforms agenda, which a Beijing media report said “is an issue of deep concern to China because of its increasing economic interaction with India.”

“If the BJP wins an overwhelming victory in Gujarat , the Modi administration may take more radical approaches to economic reform. China’s companies will feel the changes no later than India’s,” said a commentary in the Global Times.

“China is witnessing a boom in outbound investment, with direct investment to India in 2016 reportedly many times higher than the year before. The outlook for India’s economic reforms is deeply related to a good number of Chinese companies doing business in India such as Xiaomi and OPPO.However, if viewed from another angle, a loss for the BJP in Gujarat would be the biggest setback yet for the economic reforms initiated by the Modi administration. It’s possible that voters in other Indian states might be influenced by a BJP loss in Gujarat and Modi’s economic reforms might then be abandoned halfway due to a possible domino effect.”

The commentary noted that “Modi’s reforms have drawn fierce opposition from other parties and some economists, but those most qualified to evaluate the “Gujarat model” are the people of Gujarat.”

“Whatever the election result is, it will have a great impact on the public opinion environment for the implementation of the rest of Modi’s reform agenda,” it said.
The paper said “China should take a close look at the BJP’s Gujarat campaign.”

“Companies doing business in India should prepare for possible changes in economic policy over the long run and possible volatility in India’s financial markets next week after the results are announced,” it concluded.