Live from the New York Metals and Minerals a new guest discussing the Indian elections

May 13, 2014

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Click here to visit Jayant Bhandari website and read his impressive bio.

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    May 13, 2014 13:30 PM

    India is a classic example of the destructive nature of political power. To get anything done at a reasonable speed, bribes have to be paid at all levels.

      May 13, 2014 13:54 PM

      Indonesia = bribe central.

    May 13, 2014 13:23 PM

    Great information. India is a place I know nothing about

    May 13, 2014 13:12 PM

    With all due respect to everyone’s opinion, I found this segment extremely one sided and very negative or pessimistic.

    India: Considered 3rd world country
    Population: 1.2 B

    Due to liberalization of industries in early last decade (during 1995-2005), India saw a massive growth but it was not sustainable as Government (Congress Party) in last 10 years pretty much did nothing and just enjoyed the yesteryear. Unfortunately the judiciary system is not very strong and corruption is high at all levels.

    Friday 16th 2014: Election results will be declared

    Three scenarios:
    1. BJP party comes into power with full majority and Mr. Narendra Modi becomes next PM of India who is perceived as strong leader
    2. Coalition government as single party cannot get full majority, yet Mr. Narendra Modi becomes PM
    3. Coalition government but BJP is not in power – very unlikely scenario

    Think of this election as the election won by democratic party – Obama against republican party – Bush. Back then US came close to financial collapse, and NO matter how good the next leader is, it was a harsh road ahead. Even after 5 years, people are feeling the effects of recession and salaries are way below 2008 levels.

    Corruption has been dwelling in India for decades and has become part of culture, hence it would take some time to bring it down. Also law and order are on books and badly implemented hence it would take some time to improve on those areas as well. Revamping a society and cultural behavior can take years or even decades.

    Scenario 1: BJP in full majority
    1. Business/trade friendly government hence expect better trade policies, which will also culminate into better infrastructure projects in all sectors and areas
    2. Foreign Investment will start pouring in as BIG companies want to tap into 1.2 B population

    How does this help an investor?
    1. In short run we might see Indian stock market go parabolic for next couple months or even a year
    2. If you know where to bet your money then you can make significant gains in short period
    3. BEWARE: Once the initial euphoria wanes, then the real test comes. Can the new government deliver? Based on historical precedence the answer would be disappointment all over again, but lets give them benefit of doubt as Mr. Modi current Chief Minister of Gujarat has done wonders in Gujarat as perceived by the people. So it wont be a surprise that after initial euphoria, we might see some disappointment and then a steady growth…. something like 1 yr awesome followed by a year of disappointment followed by slow and steady growth for coming decades….
    4. Will it help Gold: Absolutely, as Gold import tax would come down, Indian Rupee will be appreciating there by average people will start buying gold/silver again driving the price higher

    Scenario 2: Coalition government
    Not a good scenario and might even be bad for India’s growth

    Scenario 3: Not very likely at all
    Don’t expect any change from last 10 years, expect more derailment