• JPMorgan CEO Jamie Dimon in April said Narendra Modi had done “an unbelievable job” leading India.
  • But effusive praise from business titans didn’t persuade voters to give Modi the victory he wanted.
  • Modi will now have to govern with allies, and the surprise result hit the Indian stock market. .

    In a major upset, Indian Prime Minister Narendra Modi lost his absolute majority in parliament on Tuesday.

    But, back when most expected Modi to cruise to a third big election victory, Western business titans lined up to praise him for transforming what is set to become the world’s third-largest economy by 2027.

    His pro-growth, pro-business policies have been a huge draw for tech giants like Apple and Tesla, both of which have signaled intentions to expand operations there.

    In April, JPMorgan CEO Jamie Dimon effusively praised the Indian leader during an event at The Economic Club of New York.

    “Modi has done an unbelievable job in India. I know the liberal press here, they beat the hell out of him,” Dimon said. “He’s taken 400 million people out of poverty.”

    Dimon also said he thought US officials needed to stop "lecturing" Modi on how to run India and instead start taking lessons from the world's most populous democracy.

    "They've got an unbelievable education system. Unbelievable infrastructure. They're lifting up that whole country because this one man is tough," Dimon said.

    "He's breaking down some of the bureaucracy," he added. "And we need a little bit more of that here."

    Representatives for Dimon didn't immediately respond to a request for comment on the election result sent outside regular business hours.

    Dimon isn't alone. Apple CEO Tim Cook met Modi in April of last year, saying the company shared his "vision of the positive impact technology can make on India's future."

    "India is an incredibly exciting market. It's a major focus for us," Cook said in a November earnings call. "I was just there and the dynamism in the market, the vibrancy is unbelievable."

    Without an absolute majority, Modi will rely on the support of smaller parties, who could oust him if they switch allegiance. News of the shrinking majority hit the Indian stock market on Tuesday — it registered its most significant daily drop since March 2020.

    However, experts say the electoral surprise is unlikely to unravel his past reforms.

    "This surprise creates political and policy uncertainties that will have at least short-term consequences," said Jeff Lande, a nonresident fellow at the Atlantic Council's South Asia Center.

    "A reversal of the sort of investments and capital expenditure that the government has advanced in recent years, in favor of a return to subsidies, protectionism, and welfare programs, is unlikely," he continued.

    It is true that his decadelong reign as India's prime minister has coincided with a decline in the country's poverty levels: Figures from the World Bank indicate the share of its population living in extreme poverty dropped to 12.9% in 2021 from 18.8% in 2014.

    Some of Modi's critics, however, may argue that his track record in economic policymaking has been uneven.

    In October, India's unemployment rate hit 10.1%, per the Centre for Monitoring Indian Economy. That is the first time the country's jobless rate has exceeded 10% since the COVID-19 pandemic.

    "Growth has been good, but it has to be set in perspective," Raghuram Rajan, a former governor of the Reserve Bank of India, told the Financial Times in January.