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India’s election results deal a blow to Modi’s political, economic plans

Indian Prime Minister Narendra Modi gestures as he arrives at the Bharatiya Janata Party (BJP) headquarters in New Delhi, India, June 4, 2024.

Adnan Abidi | Reuters

The election result in India has turned out to be a huge political blow for Prime Minister Narendra Modi and his ruling party, and has major implications for how he intends to govern the country, observers say.

Modi did not win the landslide victory that exit polls widely predicted before the results. Instead, he will begin his third term with a much weaker mandate than initially anticipated.

His Bharatiya Janata Party lost dozens of seats, reducing its projected total to 240, falling short of an outright majority in the lower house of the country’s parliament.

It was a stark difference from the sweeping mandates of 2014 and 2019, when the BJP won 282 and 303 seats respectively, achieving a majority on its own.

Made with flourish

Modi projected a brave front, touting his election victory as “the first time after 1962 that a sitting government has emerged victorious for the third time,” during a speech at the BJP headquarters in New Delhi on Tuesday.

He added that it will be “a new ‘Golden Chapter’ in India’s development.”

But the outcome is more complicated for Modi, who will be forced to rely on coalition partners for the first time in his decade of rule, and some of them may not share his economic or political agenda for the country.

“We are in uncharted territory,” Neelanjan Sircar, a senior researcher at the Center for Policy Research in New Delhi, said Wednesday.

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“We have never seen a Modi government have to act in coalition. We know that the party has been involved in decisive action, in centralization,” Sircar told CNBC’s “Squawk Box Asia.”

“Can they adapt in the way that a party needs to and a leader needs to when leading a coalition?” she said, adding that Modi will likely have an “uneasy relationship” with his coalition partners.

Hindu nationalism

India’s main opposition party, the once-dominant Indian National Congress, won 99 seats, a sharp change from the 52 seats it won in 2019.

Together with its coalition partners (the National Inclusive Alliance for India’s Development, or INDIA), the opposition alliance won 233 seats, a much better result than expected.

Veteran investor David Roche called the election result an exercise in “karma” and added that Modi had to lose the election.

“It’s his face on everything and he lost it in the northern central states. That’s very significant because what it tells you is that something is wrong,” Roche, president and global strategist at Independent Strategy, told CNBC’s “Street.” . Signs Asia” on Wednesday.

Elections in India: there are still

It showed that Modi’s proposal to run on Hindu nationalism did not work in “Hindu nationalist areas”, he said, adding that he hopes Modi governs now for the sake of economic reforms.

The BJP’s performance in Uttar Pradesh, which has been the ruling party’s stronghold for the past decade, caused one of the biggest shocks in the elections. The party suffered some of its high-profile losses here, with BJP political heavyweights like Smriti Irani, among others, losing their seats.

In another setback in Ayodhya, the BJP lost a key constituency in Faizabad just months after Modi inaugurated the newly built Ram temple. The controversial temple was erected on the site of a mosque razed by Hindu extremists, which analysts said was intended to energize the Hindu voter base.

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In the previous two elections, the BJP really had “the Hindi heartland under lockdown” of India, Sircar said.

This time it faced very significant losses in three of those states: Maharashtra, Uttar Pradesh and Rajasthan, the analyst added, stating that this was mainly due to the overreach of the Modi government.

In the run-up to the election, “we had two chief ministers arrested. We had many other political opposition leaders facing investigation agencies… in some places, people said they were worried about the constitution,” Sircar noted, and He added that The government had crossed several “red lines.”

Critics have noted that under strongman Modi’s rule, India has witnessed signs of democratic backsliding given the persistent crackdown on minority rights and civil society.

A ‘moment of humility’

Before the election, Modi’s popularity endured despite India’s economic problems, such as high youth unemployment, inflation and income inequality.

While Modi retains his charisma, he has lost that “aura of electoral omnipotence,” Michael Kugelman, director of the Wilson Center’s South Asia Institute, said in a post on X.

“That’s a big part of what has long defined him as a leader,” he said, adding that it was a “humbling moment” for both the BJP and Modi.

Modi's economic agenda could be altered after a shorter-than-expected mandate in the Indian elections

Speaking as results were still coming in on Tuesday, Congress leader Rahul Gandhi said the election result was a victory for the people and democracy of India.

“This was a fight to save the constitution,” he said, during a news conference in New Delhi, adding that it sends a strong message to Modi that “people did not like the way you ruled the country.”

The election result was “good news” for Indian democracy in general, Roche said.

“What is wanted is for India to be a true democracy, not something devised on a populist basis, which will ultimately further damage economic performance.”

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