India’s 2024 election results: Modi struggles to stay on top

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Narendra Modi’s first decade as India’s prime minister came with many surprises. However, what happened on Tuesday morning was no less of a surprise, when he won his second election but lost his party’s majority in Parliament.

With that defeat, Mr Modi’s image of invincibility appeared to fade for the first time since he took office in 2014.

The election results were particularly shocking because, after nearly seven weeks of voting across the country, exit polls released just days before the final vote count showed that Mr. Modi’s Bharatiya Janata Party would win by a landslide, as it had twice before.

Instead, the Bharatiya Janata Party won only 240 seats, far short of the 272 needed to form a government. The opposition coalition led by the Indian National Congress party won 235 seats.

With 52 seats won by the BJP’s allies, Mr Modi will remain on top. But his charm has waned, and his leadership has fundamentally changed.

When Mr Modi came to power in 2014, he promised economic progress, an end to corruption and a return to putting Hinduism at the centre of India’s identity. Through all this, he presented himself as a uniquely strong leader, able to inspire his followers to work for the country.

This was a contrast to the previous government. Before Mr Modi was first elected, India had 25 years of coalition governments. Prime Ministers from the Congress Party, the BJP and smaller third parties took turns running India as a committee. Mr Modi broke that tradition and led a new single-party system dominated by the BJP.

As a leader, Mr Modi has shown little interest in sharing power. When he demonetised most of India’s paper currency in 2016, not even his finance minister knew about the decision in advance. When he decided to impose de facto martial law on Jammu and Kashmir, India’s only Muslim-majority state, he presented the plan to parliament as a done deal, without seeking approval.

But those days are over now.

The two biggest parties that have emerged as the BJP’s new alliance partners are led by N. Chandrababu Naidu and Nitish Kumar, seasoned parliamentarians and known as technocratic moderates. Both are likely to demand more power in Parliament. In fact, both are being seen as potential candidates for the prime minister’s post if another coalition is formed, led by either the BJP or the Congress.

When the first nationwide electoral maps showing the number of seats won and lost in parliament were released on Tuesday, they revealed a surprising new pattern.

The maps showed that Mr Modi’s party had lost massive grounds in the Hindi heartland states of northern India, which were considered BJP strongholds.

At the same time, the BJP made inroads in regions that had resisted Mr. Modi in the past. It lost dozens of seats in the northern state of Uttar Pradesh but gained significant seats in the eastern state of Odisha and the southern state of Telangana.

The only part of the country that now looks unified by a single party is the “tribal belt”, which stretches across the central states. Its relatively poor communities have been efficiently targeted by the BJP’s Hindu-first politics and welfare benefits.

Investors in India’s stock markets in Mumbai reacted eagerly to the early exit polls. On Monday, they bought heavily, pushing up the prices of so-called Modi stocks, those linked to the prime minister’s spending priorities or those expected to benefit from his fiscal policies.

When the actual vote results were counted, those stocks crashed. Shares of the Adani Group’s flagship stock lost nearly 19 percent of their value in single-day trading. The blue-chip index declined nearly 6 percent, erasing nearly all of its gains in the first five months of the year.

Mr Modi remains popular among India’s business tycoons, but investors need to figure out which companies will benefit from the new government.

Chris Wood, global head of equity strategy at investment bank Jefferies, warned last year that he expected the Indian stock market to “fall by 25 per cent, maybe even more” if Mr Modi lost. Historically, Indian companies have performed equally well during periods of coalition government. So, Mr Wood said that even if Mr Modi was not in power, he expected stocks to “bounce back sharply” based on the strength of the country’s economy.

This new era in Parliament will begin with some round of political vendetta. Politicians who fail to get seats for their boss will be shown the door. Smaller parties may demand cabinet posts, which will mean replacing BJP members

Policies will need to be revised. Will India focus on export manufacturing so it can replace China as the world’s factory? Will it take steps to protect local industries that fear foreign competition?

Milan Vaishnav, a senior fellow at the Carnegie Endowment for International Peace, warned that India cannot return to exactly the same coalition politics as it did before Modi. His new partners will have demands that match New Delhi’s autocratic style with Modi’s.

The kind of state leaders he now needs as coalition partners, Mr. Vaishnav said, are “as autocratic as the national government.” For example, they can ask federal police agencies to arrest opponents, as Mr. Modi has done.

India’s election was the largest in the history of democracy, with more than 600 million voters casting their votes in six phases. This time, there were no complaints about electronic voting machines, or fears that India had become a dictatorship under Mr Modi.

In a hard-hitting speech from the BJP headquarters on Tuesday night, Mr Modi called the elections a “celebration of democracy”.