Indian Election Result Will Boost Economy

The Indian diamond industry has been hit hard by the rupee’s decline over the past year since it has made rough goods more expensive, while jewelry vendors were unable to pass on the extra costs to consumers by raising rupee-denominated prices.

The landslide win for the Bharatiya Janata Party (BJP) in the Indian elections last week and the likelihood of a strong and stable central government that is expected to address the country's economic issues is positive for the country, according to a report by influential ratings agency, Moody's.

"Moody's believes that the new government's strong mandate increases the possibility of a stable central government that will pursue a shared economic agenda to address India's macroeconomic challenges," said the report. "India's decisive election outcome is credit positive."

The BSE 30-share index, Sensex, has gained more than 18 percent in the past three months on expectations that the BJP would win a strong majority and pursue policies helpful to investment and economic growth.

"Moody's also considers that the completion of the election will allow stalled policies relating to the corporate and infrastructure sectors to resume, a credit positive for the country's corporates," Moody's VP and Senior Credit Officer Vikas Halan said.