India likely to see rise in populism; trend poses risk to economy: JPMorgan

Populism is linked with weaker economic growth in the long-term, which could weigh on India's rich equity valuations, says bank.

India is likely to see a surge in populist politics as it battles the world’s third-highest number of coronavirus cases, posing a key risk for companies whose fortunes are closely tied to the economy, according to JPMorgan Chase & Co.

“Rising populism could impact market valuations, at least in part due to protectionist trade and foreign direct investment policies inhibiting growth,” analysts led by James R Sullivan in Singapore, wrote in a note. “Populism is a justifiable concern for investors.”

India is battling one of the world’s fastest growth of the epidemic, while the recovery in business activity remains patchy