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Newsdeck

Modi Seeks to Shore Up Coalition to Secure Third Term in Power

Modi Seeks to Shore Up Coalition to Secure Third Term in Power
An image of Bloomberg's live vote count of India's election results shows the BJP and allies leading in enough seats to maintain a slim majority. Data as of 7 p.m. local time.

Indian Prime Minister Narendra Modi is gearing up for coalition talks after his party lost its majority in parliament, forcing him to rely on allies to form a government for the first time since he stormed to power a decade ago. 

Modi’s Bharatiya Janata Party needs to secure the support of two regional, although notoriously unreliable allies, to stay in office for a third term. The BJP-led National Democratic Alliance is expected to hold a meeting in New Delhi Wednesday afternoon.

Official results Tuesday showed the BJP-led coalition secured enough seats to form a government if it sticks together, although the party remained short of the 272-seat majority on its own.

Modi claimed victory for his coalition, telling cheering supporters at his party’s headquarters that the “NDA has won a mandate to form the government” for a third straight term. “We are very, very grateful to the people who have reposed full faith in the BJP and NDA,” he said.

“There’s going to be a pound of flesh extracted by the coalition partners that have implications for policies,” Irfan Nooruddin, a professor of Indian politics at Georgetown University. “I think for the BJP itself there’s going to be a really serious reckoning.”

The opposition alliance led by the Indian National Congress is also set to meet Wednesday evening to shore up support with its partners, and potentially find a path toward forming its own government.

India’s stocks had their worst day in more than four years on Tuesday as it became clear the election outcome would be much closer than expected. Markets had hit a record high on Monday after exit polls released over the weekend showed Modi would coast to an easy victory in the marathon, six-week election. Before voting kicked off on April 19, the prime minister had boldly predicted that his alliance would win a whopping 400 seats.

Modi now needs to secure the support of two key members of the NDA coalition who control some 30 seats — enough to flip the balance of power in parliament. Leaders of those two parties have a history of switching sides, and only joined up with Modi a few months ago, making it unclear whether they will stick with him or back the opposition bloc. A spokesperson of the allies, the Telugu Desam Party in the southern state of Andhra Pradesh, affirmed support for Modi’s coalition.

The opposion bloc, spearheaded by the Congress party’s Rahul Gandhi, grew its support by tapping into voters’ concerns about India’s growing inequality, pervasive joblessness and rising living costs.

The result is a stunning disappointment for the 73-year-old leader, who has been the main face of the BJP’s election campaign and built the party primarily around himself. Besides raising questions about Modi’s own future as prime minister, a weak coalition government will likely make it difficult for him to push through tough economic reforms or further his Hindu nationalist agenda, assuming he returns to power.

The lackluster performance marks the first major setback in national polls for Modi. He had looked unbeatable heading into the election, backed by one of the world’s fastest-growing economies and the fulfillment of key promises appealing to India’s Hindu majority, including the building of a temple on the site where a 500-year-old mosque had been torn down.

Signs of trouble for Modi emerged after the first of seven rounds of voting. A dip in turnout triggered a broad get-out-the-vote effort that saw Modi adopt a more strident tone, firing up his Hindu nationalist base with divisive anti-Muslim rhetoric and attacks on the opposition’s welfare policies.

Many of the BJP’s alliance partners don’t share the Hindu nationalist views that are core to the BJP agenda. That means that the BJP could be forced to dial back some of its divisive rhetoric and set aside ambitions to more aggressively reshape India into an overtly Hindu nation. A weakened coalition may also force the BJP to offer cabinet posts and other concessions to alliance partners, while it may struggle to enact ambitious economic reforms needed to turbocharge growth.

Even with a reduced mandate or a change in government, India’s growth trajectory should largely remain positive. Business leaders from Elon Musk to Jamie Dimon have hailed India’s potential as an alternative to China, with some economists projecting that the nation’s $3.5 trillion economy can become the largest contributor to global growth within the next five years.

Modi’s weakened mandate “will make the passage of contentious economic reforms more difficult,” said Shilan Shah, an economist at Capital Economics. The new government “could still do enough to keep potential growth at 6-7%,” he said. That would leave the economy on “course to more than double in size over the next decade,” he predicted.

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