The humbling of Narendra Modi

Narendra Modi was exuding his usual bravado last weekend as India’s mammoth six-week election came to a conclusion.

The prime minister, who at one stage during the campaign spoke of a divine mandate to rule, claimed that Indians had “voted in record numbers” to re-elect his Bharatiya Janata party and its allies to a third five-year term.

Fresh from a three-day meditation retreat, Modi took a swipe at the opposition and its most prominent leader Rahul Gandhi, the fourth-generation member of the family that has dominated the Indian National Congress. “They are casteist, communal and corrupt,” he declared.

That confidence seemed justified when exit polls released on Saturday evening showed the BJP and its National Democratic Alliance partners heading for a resounding victory — possibly even the 400-seat supermajority in the 543-seat parliament he was shooting for.

Instead, when the ballots were counted, the results turned out to be humbling. Voters have handed Modi, a leader who for many around the world has become synonymous with India, an electoral upset of a magnitude unseen in years.

The BJP lost its majority, winning only 240 seats and leaving Modi more dependent on his NDA coalition partners than ever before. The opposition INDIA alliance, spearheaded by Congress, got 234 seats — despite being far outspent on campaign funding by the BJP and targeted, they claimed, by systemic legal harassment and raids.

Analysts say India’s new political landscape will mean a transformed and potentially diminished Modi. The 73-year-old will face an invigorated parliament, which will probably be a check on his Hindutva or Hindu nationalism, and a newly empowered opposition which will challenge Modi’s omnipresence in Indian politics and society.

“To say Modi will have to moderate is to understate things,” says N Ram, a former editor of The Hindu newspaper and current director of its publisher group. “He’s going to have to change course, and Modi has never done this before.”

Foreign investors and India’s partners are now adjusting to a new reality in which a strongman leader — criticised by liberals as an autocrat, but prized by business as an embodiment of decisive government — will need to make compromises to survive in a coalition.

During the campaign, Modi had taken the unusual step of predicting a stock market rally — and following the exit poll, investors had poured money into Indian stocks and sent the Nifty 50 and BSE Sensex indices to all-time highs on Monday.

But many of the same investors rushed to the exit as the actual results came in. Foreigners sold $1.5bn on Tuesday, a record in a single day. Shares of the companies owned by Gautam Adani, an ally of the prime minister from his Gujarat days — part of a group termed “Modi stocks” by Hong Kong brokerage CLSA — led the rout.

Rather than making plans for what to do with a supermajority, Modi has spent the week rushing to cut deals with suddenly prominent “kingmaker” allies so that a coalition government can be sworn in by the weekend.

In a speech to newly elected NDA members on Friday, a conciliatory sounding Modi told his junior partners: “It is important to have a majority to run a government, but for running the nation consensus is needed.”

How did Modi suffer such an unexpected rebuff?

A BJP campaign centred on Modi’s personality allowed the opposition to tap simmering anti-incumbency by focusing on economic hardship and to warn that constitutional rights were threatened by a prime minister bent on stoking religious polarisation.

The state that did most to rob the prime minister of his majority was Uttar Pradesh, India’s most populous with an estimated 240mn people and the scene of some of its fiercest political, caste and religious disputes. The BJP won landslide victories there in 2014 and 2019 with religious-tinged populism that attracted Hindu voters across age, caste and gender.

Modi in January inaugurated a new temple devoted to the deity Ram on the site of a destroyed mosque in the state, a divisive high point of his Hindu nationalist project.

The BJP’s manifesto, titled “Modi’s Guarantee”, voiced his pledge to make India a developed country by 2047, along with a plan to replace the country’s religious laws with a uniform civil code — a longstanding Hindu nationalist demand opposed by many minority Muslims.

But when results came in, the BJP and its allies’ seat count in the state nearly halved to 36 of 80 seats, while the INDIA alliance defied expectations to win 43. The BJP even lost in Faizabad, the constituency that contains the new temple in Ayodhya. Modi won his constituency in the holy city of Varanasi in UP by less than half the margin by which Gandhi won his own seat in Raebareli, also in UP.

“The BJP had made a lot of false promises in their manifesto, so we went to the people and asked them about those promises,” says Kishori Lal Sharma, a Congress candidate who beat BJP minister Smriti Irani in the Uttar Pradesh seat of Amethi. “Did you get 20mn jobs? Did farmers’ income double? . . . On that basis they decided to vote for me.”

Most of the seats the BJP lost went to the Samajwadi party, a socialist party in the INDIA alliance that has long drawn support from lower-caste groups and Muslims.

This included Kairana, a largely rural constituency in western UP that the BJP won in 2019 but went to the Samajwadi party’s 29-year-old candidate Iqra Choudhary in a surprise result. Naved Chaudhary, a local party activist, says BJP workers simply “did not work as hard as they are known to”.

Some residents say the opposition’s focus on rural distress and farmers’ issues overshadowed the Hindu nationalist and polarising rhetoric foregrounded in Modi’s campaign, including divisive remarks calling Muslims “infiltrators”.

“The main issues are joblessness and inflation. Everything has become so expensive,” says Arif Khan, a 60-year-old farmer. “The biggest problem with the BJP is that they are always trying to divide and rule.”

Ahead of the polls, the INDIA alliance stitched together an agreement in the state between Congress and the Samajwadi party to avoid head-to-head contests that would split the anti-BJP vote.

Modi’s party, by contrast, irked voters in some constituencies by fielding unpopular candidates, including defectors from opposition parties who faced corruption allegations.

“It was just a case of overconfidence,” says one BJP state-level legislator, who spoke under condition of anonymity. “In a lot of places there was discontent against [BJP candidates] which nobody was willing to listen to.”

Analysts say the INDIA bloc also appeared to succeed in winning over Dalits, India’s most marginalised caste, who account for roughly a fifth of the national population and had gravitated towards the traditionally upper-caste BJP in recent elections.

INDIA candidates like Gandhi and Samajwadi party president Akhilesh Yadav repeatedly claimed on the campaign trail that the BJP sought a two-thirds parliamentary majority in order to change the constitution, claiming this would threaten lower-caste members’ benefits like job quotas. Modi denied this.

Dalits “got worried that the rights that our constitution has given us, the BJP is trying to take that away”, says Arvind Jhal, a Dalit activist with a BJP-affiliated party in Kairana. The ruling party’s campaign “smacked of arrogance. They were making it all about Modi.”

Despite the rebuke it received from voters, many Indians say it would be wrong to write off the BJP in UP, where it nonetheless retains strong support.

“No matter what has happened, only Modi should be prime minister,” insists Sangeeta, a 37-year-old lower-caste BJP supporter. “I voted for him three times.”

Indians are now trying to fathom what the paring back of Modi’s electoral support might mean in practice.

Modi’s two biggest junior coalition partners, regional parties Telugu Desam party and Janata Dal (United), which won 16 and 12 seats respectively, both have significant support from Muslim voters, and they could play a role in moderating some of the Indian leader’s Hindutva programmes.

Analysts foresee a more unpredictable path ahead as Modi is compelled to work within a genuine coalition government in which junior members can make credible threats to leave.

“He has to be more accommodative, he has to be more liberal. He cannot go ahead with his agenda as it was because the political dynamic has changed,” says K Nageshwar, a Hyderabad-based political analyst.

He believes Modi might need to retreat from some of his key programmes planned for the third term, including the declaration of a uniform civil code.

Indian businesses and foreign investors are also racing to make sense of the new reality. Before this week’s poll upset, most had counted on Modi entering a third term with an agenda to pursue more market-friendly policies, including possible changes to land and labour laws.

“There’s no doubt passing reforms will now be harder; you’ve got to find support from coalition parties, some concessions will need to be made,” says Shilan Shah, deputy chief emerging market economist with Capital Economics. “It still feels to me that Modi is in a strong position, even if that doesn’t necessarily capture the mood right now.”

After the last election in 2019, when a BJP landslide became apparent, corporate India was vocally supportive. Five years later, none of India’s main business lobbies or CEOs have yet publicly commented on the results or toasted Modi on his third term. “They looked devastated,” one Mumbai-based executive says of the BJP. “I would have normally called and congratulated them, but I don’t know what to say.”

Modi’s opposition rivals are openly revelling. “For the last 10 years there was no opposition, so they were running the government at their own will,” says Chaudhary, the Samajwadi Party activist in UP. “Now the dictatorial ways will have to stop.”

Even some Modi supporters are expecting bumpier times ahead. The BJP’s partners “will pressure them”, predicts Sanjeev Kumar, a BJP activist near Kairana. “I don’t think the government will be able to complete their full term.”