Narendra Modi’s first decade as India’s prime minister has been full of surprises. None, however, was as surprising as what happened on Tuesday morning, when he won a second term in office but lost his party’s majority in parliament.
With this defeat, Modi’s aura of invincibility since taking office in 2014 appears to have faded for the first time.
The results were particularly stunning because after nearly seven weeks of tense voting across the country, exit polls released days before the final count showed Modi’s Bharatiya Janata Party set to win by a landslide, as it had twice before.
The BJP ultimately won only 239 seats, far short of the 272 needed to form a government, while the opposition coalition led by the Indian National Congress won 235 seats.
Modi will remain in the lead, thanks to a BJP coalition that won 52 seats, but his appeal has waned and his leadership has fundamentally changed.
Modi’s aura of invincibility has been shattered.
Modi came to power in 2014 promising to boost economic development, stamp out corruption and promote Hinduism as India’s core identity. In doing so, he has presented himself as a uniquely powerful leader capable of mobilizing followers to work for the country.
This is a stark contrast to the previous government. Before Modi was first elected, India was ruled by a coalition for 25 years. Prime ministers from the Congress, BJP and smaller third parties took turns running India through a committee. Modi broke with that tradition and led a new one-party system dominated by the BJP.
As a leader, Modi has no interest in sharing power. When he announced the demonetization of most Indian currency notes in 2016, not even the finance minister was informed of the decision in advance. When he decided to impose martial law in 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 gone.
The two largest parties that will become the BJP’s new coalition partners are led by N. Chandrababu Naidu and Nitish Kumar, both veteran lawmakers known as technocratic moderates. Both are likely to demand greater power in Parliament. In fact, both are seen as possible candidates for prime minister if another alliance emerges that is not led by the BJP or the Congress.
India’s political landscape was reshaped overnight.
The first national electoral maps showing how many parliamentary seats have been gained or lost were released on Tuesday, revealing a startling new pattern.
The maps show that Modi’s party lost large swathes of territory in northern Hindi-speaking states, which are considered BJP strongholds.
Meanwhile, the BJP made gains in areas that had resisted Modi in the past. He lost dozens of seats in Uttar Pradesh but gained in Odisha and Southern States Telangana.
The only region in India that currently appears to be unified by one party is the “tribal belt” that stretches across the central states. The relatively poor communities in the belt have become a clever target of the BJP’s “Hindu first” politics. Welfare.
India’s Wall Street has its ups and downs.
Investors in India’s Mumbai stock market reacted enthusiastically to early voting results, embarking on a buying spree on Monday that pushed up the prices of so-called Modi stocks – shares that are tied to the prime minister’s spending priorities or are seen as benefiting from his fiscal policies.
When the actual votes are tallied, these stocks Falling down. Shares Adani Group’s flagship stock fell about 19% The blue-chip index fell about 6%, wiping out all of its gains in 2016. First five months of this year.
Modi remains popular among India’s business giants, but investors need to understand which companies will benefit from the new government.
Chris Wood, global head of equity strategy at investment bank Jefferies, warned last year that Indian stocks “would see a correction of 25% or more” if Modi lost the election. Indian companies have historically performed just as well under coalition governments. So even without Modi, Wood said he expects stocks to “rebound significantly” on the strength of the country’s economy as a whole.
Coalition politics are back – expect a game of musical chairs.
The new era in parliament is sure to begin with some rounds of political revenge. Politicians who fail to win seats for their bosses will be swept out. Smaller parties are likely to demand cabinet posts, which means replacing BJP members.
Policies need to be revised. Will India lean towards exporting manufacturing to replace China as the world’s factory? Will it act to protect local industries that fear foreign competition?
Milan Vaishnav, a senior fellow at the Carnegie Endowment for International Peace, warned that India could not return completely to the alliance politics before Modi. His new partners are likely to make demands that match the style of authoritarianism that Modi has implemented in New Delhi.
Vaishnav said the coalition partners he needed now were state leaders who were “as authoritarian as the national government.” They could, for example, call on the federal police agency Arresting opponentsJust like Mr Modi did.
In the largest election in the history of democracy, with more than 600 million voters casting ballots in six phases, no one complained about electronic voting machines or worried that Modi’s India would become a dictatorship.
Modi gave a strongly worded speech at the BJP headquarters on Tuesday evening, calling the election a “celebration of democracy.”
