Vote counting has started in India on Tuesday after more than six weeks of polling, in a general election that has become a referendum on Prime Minister Narendra Modi.
By Tuesday afternoon, initial results showed that Modi’s Bharatiya Janata party (BJP) and its National Democratic Alliance were winning a majority, heading for a rare third consecutive term. However, India’s opposition alliance was performing better than expected, indicating the BJP had not achieved the landslide victory many had predicted.
Comfortable Lead
Although exit polls have predicted a two-thirds majority for Modi’s alliance, numbers showed its parties led in 283 constituencies, ahead of the 272-majority mark. Meanwhile, the opposition INDIA alliance led in 232 constituencies.
The Congress Party, which leads INDIA alliance, was leading in 99 constituencies. On the other hand, the BJP was falling short of a majority of its own in the 543-member parliament, with 238 seats.
The Hindu nationalist ruling party won a majority of its own in 2014 and 2019 elections. Before entering this year’s election, the BJP declared it was aiming for 400-seat supermajority. However, preliminary figures show it will have to depend on allies to form the government. Final results will be announced Tuesday evening.
Economic Repercussions
Indian stocks dropped the most in over four years on Tuesday over the prospect of Modi’s reliance on allies to form the government, reported Reuters. The Rupee also fell steeply against the dollar and benchmark bond yields were up.
The managing director of investment strategy at OCBC in Singapore, Vasu Menon, said: “A narrower-than-expected victory for Modi’s alliance may raise doubts about the new government’s ability to push through politically difficult reforms seen as crucial to sustain India’s economic growth, which is already the world’s fastest.”
“Despite this, the fact remains that the BJP-led alliance is still set to win a third term, which means continuity in the government’s infrastructure and manufacturing-led drive to boost economic growth,” Menon added.
Investors have hailed the prospects of another Modi term, expecting it will bring more years of strong economic growth and pro-business reforms.
Dipan Mehta, founder director at Elixir Equities in Mumbai, said: “The biggest disappointment for the market is the fact that BJP does not have a majority (yet)…that opens up a Pandora’s box because all the other players…are all quite volatile.”
Opposition Performance
The centrist Congress party, led by Rahul Gandhi, and its INDIA alliance have outperformed expectations. The alliance had come together for the first time in this year’s election with the aim of defeating Modi.
Political analyst Rasheed Kidwai has attributed the Congress party relative success to a “spirited campaign” that focused on rising unemployment, inflation and inequality.
“Congress party and other opposition parties have showed tremendous resilience. To have a stronger opposition augurs very well for India’s democracy that has taken a hit during Modi’s 10-year rule,” Kidwai told the Associated Press (AP).
Coalition Government
Although the BJP has governed in coalition government since coming to power in 2014, it has held a majority on its own.
If the current trends hold, Modi’s party will need a coalition to form the government. This would diminish Modi’s power as a strongman leader who secured landslide victories in 2014 and 2019 elections.
In such a scenario, Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace, predicted that the BJP would be “heavily dependent on the goodwill of its allies, which makes them critical players who we can expect to extract their pound of flesh, both in terms of policymaking as well as government formation.”
“This would be truly, you know, uncharted territory, both for Indians as well as for the prime minister,” Vaishnav said.
Global Impact
Owing to India’s strategic position in Asia and its large fast-growing economy, the election result will reverberate far beyond its borders, drawing the attention in other countries, especially the US, China and Russia.
Under Modi’s rule, India’s status as an emerging global power has risen. Several western nations consider India a counterweight to China’s increasing assertiveness in the region even as India maintains its historic relations with Russia.
Dr Chietigj Bajpaee, senior research fellow at Chatham House, said that Modi’s failure to secure majority might restrain some of the policies he pursues. “In regard to foreign policy, the Modi government has projected an image of India as a rising and more confident power. Some of this relates to India’s material accomplishments, with India on course to be world’s third largest economy by the end of this decade,” he told the Guardian.
“However, there is also an ideological angle as the Modi government pursues a more assertive foreign policy and seeks to promote India as a civilizational state. All of this will continue under a third term Modi government, although it will be tempered by its weaker mandate,” he said.
