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Meet the man tipped as India’s next leader

Key personalities in India's election

India's opposition leader, Narendra Modi, may be the front-runner to lead Asia's third-biggest economy in the general election that starts next week but he is a divisive figure both at home and abroad.

Some view him as a Hindu extremist, who, as the head of the north-western state of Gujarat, allegedly turned a blind eye while mobs attacked Muslims during riots in 2002. The violence triggered a travel ban on Modi by the U.S. and some European countries such as Britain.

Others say Modi is an effective administrator; his policies of opening up Gujarat's economy – a major manufacturing hub of India – and making it easier to do business there have proved successful and are just what the sluggish broader economy needs.

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"If you look at the opinion polls, Modi is clearly the front-runner and it doesn't feel like the assessment of who is leading the polls is going to change anytime soon," said Rahul Bajoria, a regional economist at Barclays.

"In terms of his state's performance, Gujarat has consistently outperformed the overall economy," Bajoria added. "Modi is viewed as someone that takes decisions."

BJP prime ministerial candidate Narendra Modi
Chahat Ram | Hindustan Times | Getty Images

A five-week election in India starts Monday. According to a recent survey from the Pew Research Center, voters in the world's biggest democracy favor Modi's nationalist Bharatiya Janata Party (BJP) to the ruling Congress party by a ratio of more than three to one.

The elections take place against a backdrop of an economy that has slowed to 4.7 percent in the last quarter of 2013 from near-9 percent in the 2011 fiscal year.

India is just one of many major emerging markets that are in an election year and the repercussions for the economy and foreign investment could be significant, observers say.

Read MoreElection year for emerging markets: What to expect

"If the elections go well and we get a strong party at the center -- a strong government at the center -- it will improve sentiment," Keki Mistry, CEO and CFO of India's Housing Development Finance Corp (HDFC) told CNBC last month.

"If it improves sentiment the investment cycle will start picking up. If the investment cycle starts picking up that will increase jobs and raise consumption," he added.

India gears up for largest election

Friend or foe?

The U.S. will be watching the elections closely, even as relations with its long-time Asian ally soured at the end of last year following the arrest and strip-search of an Indian diplomat in New York.

Analysts say it's in both U.S. and Indian interests to get off to a good start if the BJP forms India's next government, noting that bilateral trade between both countries is estimated at roughly $100 billion a year.

They add that the U.S. needs a friendly India as it pulls U.S. troops out of Afghanistan and seeks to balance China's power in Asia. Millions of Indians live in the U.S. meanwhile and economic ties between the two countries are strong.

According to media reports, the U.S. government could drop the travel ban on Modi if he becomes India's next prime minister. Britain lifted its travel ban on Modi in 2012.

"Modi will want to put U.S. relations on a new path and separate it from what he may feel personally about the visa ban," said Vishnu Varathan, market economist at Mizuho Corporate Bank. "It's also in U.S. interests to lift a ban on the prime minister of a country seen as a strategic partner in Asia."

On the domestic front, analysts say that while the economic policies of the BJP and ruling Congress do not vary significantly, the focus is on whether Modi can transfer the economic policies that proved successful at a state level to a national level.

The Congress party has come under fire for not doing enough to boost foreign investment, bring down inflation and rein in a current-account deficit.

The BJP's vision, under Modi, has put an emphasis on urbanization, infrastructure and cutting back red-tape.

"In terms of economic policy, Modi is seen as a reformist and he won't want to squander that reputation, so he's likely to welcome foreign investment and friendly ties with the U.S.," said Varathan.

"Modi has said that Congress has mishandled the economy, so the onus is on him to now fix it," he said.