Illustrated hands placing completed ballot in box

From Ballot to Boardroom: Business Implications of Upcoming Elections in India, Mexico and the EU

April 30, 2024

This year, more than 60 countries representing half the world’s population will hold national elections. The next elections in this “superelection” cycle are India, Mexico and the European Union. Here’s a deeper look at what businesses should watch for to protect and expand their license to operate ahead of these critical elections:

India (April 19 – June 1)

Elections began in April in India, the world’s largest democracy, with an expected turnout of more than 93% of nearly 970 million eligible voters. The largest and second-longest election in history will span seven phases across 543 parliamentary constituencies, with results set to be announced on June 4. 

The elections in India will test the Bharatiya Janata Party’s (BJP) hold on power, under the National Democratic Alliance (NDA), for a third consecutive term. Prime Minister Narendra Modi, with a robust 78% approval rating, is poised for re-election for five more years, with a national campaign focusing on key demographics like women, youth, farmers and the impoverished. His foreign policy will balance maintaining ties with Russia for energy and military support while strengthening relations with the United States amid tensions with China. This balancing act will hinge on how well Modi reinforces his populist election message at home. Congress, India’s oldest political party, is struggling after consecutive defeats and faces post-election uncertainties. A coalition government or lack of a clear majority post-election could heighten political uncertainty and delay significant corporate reforms initiated by Modi’s government. 

Why It Matters

India is the world’s most populous country and on track to become the world’s third-largest economy by 2027, surpassing Japan and Germany. It is also the fourth-largest stock market globally and on track to becoming the third largest by 2030. Corporate tax cuts, investment incentives and infrastructure spend are all helping drive capital investment in manufacturing, poising India to become the “factory to the world.” India’s elections impact market dynamics, influence investor sentiment and guide economic policies that affect operations and activities.  

Business Implications  

India’s elections present business implications across several key issues:  

  • First, high unemployment (7.2% as of February) requires businesses to anticipate policy changes aimed at job creation. The opposition party (INC) has criticized the Modi government’s apathy and promises proactive measures, which may affect how companies align skills development and investment depending on election outcomes. The BJP’s election manifesto promises to position India as a global manufacturing hub and leader in artificial intelligence, emerging technologies, space, e-mobility and engineering, indicating significant policy reform for businesses to anticipate.  
  • Second, the BJP’s focus on national security and infrastructure needs, particularly along borders with China, Pakistan and Myanmar, underscores the importance for businesses to monitor geopolitical developments and regional stability. Companies in defense, cybersecurity and infrastructure may benefit from increased government spending.  
  • Third, rising costs and falling crop prices have heightened farmer distress, prompting businesses reliant on agricultural supply chains to prepare for disruptions and collaborate with the government on sustainable practices, technology adoption and market linkages to support small farmers.  
  • Finally, businesses will need to navigate cultural sensitivities due to India’s diverse socio-economic ecosystem and political affiliations, treading carefully to avoid alienating customer segments or damaging brand reputation. 

Mexico (June 2)

Mexico is poised to elect its first female president, former Mexico City Mayor Claudia Sheinbaum. The leading candidate represents the ruling party, Morena, in alliance with the Green Party and the Workers’ Party. Elected in Morena’s primaries, Sheinbaum plans to uphold and expand on her predecessor’s landmark projects—increasing social benefits, advancing major infrastructure projects and maintaining strong macroeconomic policies.  

Her main opponent, Senator Xochitl Galvez from el Frente Amplio por Mexico—a coalition of center-right Institutional Revolutionary Party (PRI), National Action Party (PAN) and Party of the Democratic Revolution (PRD)—offers distinct policies on the economy, health care and public safety, promising to rebuild Mexico and its institutions after Andrés Manuel López Obrado’s term ends. Jorge Álvarez Máynez’s from Movimiento Ciudadano (MC), could play a spoiler role in the next Congress, due to Mexico’s proportional electoral system, where the number of votes determines the number of seats. MC and the runner-up will likely become the main opposition forces in the lower chamber of Congress. 

Why It Matters

Immigration remains a prominent issue in the United States and at the top of the electoral agenda, and discussions on border security and tougher migration policy will continue to weigh on the U.S.-Mexico relationship.  

Meanwhile, Mexico is set to overtake China as the top exporter to the United States, with U.S.-China tensions causing investments to be redirected. Mexico is capitalizing on its position and geopolitical momentum to attract investments from the United States, China, Taiwan and Europe. However, Mexico-China trade relations—especially in sectors like automotive and EVs—have prompted calls for stricter investment scrutiny due to U.S. security concerns, potentially increasing controls of Chinese imports through Mexico.   

The anticipated U.S. presidential rematch between Donald Trump and Joe Biden could impact U.S.-Mexico relations and future of the U.S.-Mexico-Canada Agreement. While both administrations will engage in trade discussions, their approach will differ. Donald Trump has proposed a universal 10% tariff on imports; Biden will likely address sector-specific challenges in automotive, agriculture and steel. Migration and the relation with China will be a particularly contingent point. 

Business Implications

Mexico’s political stability reassures businesses despite internal security issues. Nearshoring—outsourcing tasks to nearby countries rather than distant locations—remains a focus even with challenges like water scarcity and energy reliability. While certain sectors such as high-tech manufacturing, real estate and automotive remain stable, key industries like energy, mining, telecommunications, banking and logistics stand to gain from reinforced national sovereignty. 

Contrasting welfare proposals between candidates could impact consumer spending patterns: Sheinbaum aims to expand cash-transfer programs, while Gálvez allegedly plans to cut social welfare for the elderly. This could affect businesses reliant on consumer spending. Sheinbaum’s environmental ambitions could challenge the private sector due to stricter water and energy-sourcing controls.  

European Union (June 6-9) 

Polls consistently indicate a political shift to the right for the European Parliament and across the bloc’s member states overall. Centrist parties are likely to lose seats while right-leaning anti-establishment and populist parties will probably gain seats. Voters are most concerned about poverty, public health, the economy and jobs and defense and security, according to a comprehensive EU-wide survey. Climate action and migration rank lower than in previous agendas: the former figured at the very top of the agenda of the outgoing Commission (the EU Green Deal), and the latter is what has fueled the rise of right-wing politics. As the new Commission prepares its 2024–29 agenda, the EU economy, competitiveness and the fight against poverty take center stage as key issues.  

 Why It Matters

 A shift to the right will make passing legislation highly unlikely without broader coalitions, and deregulation is likely to be proposed as a solution to lagging competitiveness with the United States and China. This shift will impact issue-focused alliances and potentially sideline sustainability goals in favor of economic competitiveness. The European Green Deal’s prominence is also waning, signaling a pivot from ambition to practical implementation of the outgoing European Commission’s flagship initiative, providing a potential advantage for less “progressive” businesses.  

Business Implications

As far as policy and legislation goes, passing laws will require broader political alliances. A new trend to expect is more regular blockage of agreed-upon legislation by opportunistic member states in the EU Council, adding uncertainty to what was a formality. This complicates legislative predictability that risks eroding trust in EU institutions. This increased unpredictability could undermine EU legislative processes and hinder corporate lobbying efforts. 

 Deregulation may be proposed to address competitiveness issues against global counterparts like the United States and China. Finally, in the sustainability space, future policies will be likely be directed at increasing European competitiveness and manufacturing for the green transition, reshoring production of key decarbonization technologies. Companies in these sectors may find new opportunities but may face challenges due to regulatory uncertainties. 

Conclusion

The impact of elections across the globe in 2024 will be felt by individuals and businesses for years to come. In some of the most populous and economically critical markets for multinational corporations, we can expect to see significant shifts in regulatory environments and market dynamics.  

Businesses must navigate potential post-election challenges in passing legislation and seize sector-specific gains, especially in renewables and innovation-driven sectors. Businesses can navigate these policy shifts by planning for multiple scenarios, engaging with regulators in their industry and diversifying supply chains that build resilience to geopolitical uncertainty.  

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