Key political risks in India

Key political risks to watch in India

India’s economy is exposed to an extended euro zone crisis and policy paralysis at home, while the coalition government is under tremendous strain from scandals and rebellious coalition partners. The risk of Prime Minister Manmohan Singh’s second term being cut short before a general election due in 2014 is low, but cannot be ruled out. The failure of Congress party in state elections in early March, and a looming fight over the cheap sale of coal fields have put him and the party under even more pressure.

The 2012/13 budget, delivered in March, shied away from commitments to bold reform, its cautious tone reflecting the government’s frailty.

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