Experts react: Modi loses ground in an electoral surprise. What will his third term look like now?

Five more years, with a twist. India’s Bharatiya Janata Party (BJP) lost ground in this year’s elections, according to early results announced Tuesday, meaning Prime Minister Narendra Modi is on track to lead a coalition government after winning a historic third consecutive term. The world’s largest democratic exercise—more than six hundred million people voted over six weeks—surprised pollsters and pundits, as opposition parties gained seats in parliament. What can we expect from a Modi-led coalition—the first time he has ever had to manage a political coalition? What was behind the electoral shifts? We turned to our India experts for the answers.

Click to jump to an expert analysis:

Kapil Sharma: A Modi-led coalition government is good news for India’s economic growth

Seema Sirohi: The BJP came into the election overconfident. It leaves humbled.

Ratan Shrivastava: After surprise results, Modi will need to govern more cautiously to keep his coalition together

Shék Jain: Expect Modi to keep pushing back against the West on climate policy, while making changes at the local level

Srujan Palkar: Factionalism split India’s political parties—and their voters

Adnan Ahmad Ansari: India’s democracy is alive and kicking

Jeff Lande: The BJP won, but uncertainty has been introduced to the picture

Nish Acharya: Indian voters just proved the axiom that “all politics is local”

Atman Trivedi: A surprising election verdict puts the BJP on notice

A Modi-led coalition government is good news for India’s economic growth

The Indian electorate handed Modi and the BJP a historic third consecutive five-year term. After an election supported by more than 642 million voters, 312 million of whom were women, Modi, the BJP, and their coalition members have secured a mandate to continue their ambitious political and economic agenda—albeit with a bit more political maneuvering and a much stronger opposition.  

Modi’s win was not a surprise, although it was not expected to be under a coalition government. Still, he is prepared to hit the ground running. Modi’s agenda will likely be executed by a new and younger coalition cabinet, though the exact portfolios and officials are yet to be announced. Even under a coalition government, this is good news for India’s economic growth and business environment. The agenda will continue to include reforms for industrial manufacturing, infrastructure, digitization, regional trade, supply chain agreements, and even land reform—with a coalition government even more likely to emphasize economics. While the Indian equities markets have not reacted favorably to the news of a coalition government, businesses will welcome continued certainty. But as the results have shown, the voters need to feel the success of these policies on the ground with jobs and economic growth.

The BJP has many challenges going forward. The party’s popularity rides on Modi—he polls twice as popular as the BJP as a party and drives a third of its votes. Looking to the future, Modi is seventy-three years old and does not have a clear successor. This is likely his last national election. His popularity and a weaker national opposition party have allowed the BJP to paper over its weaknesses—especially at the state and local levels.

Indian voters have shown that they have taken their vote seriously with the Congress party and other regional parties taking seats in traditional BJP strongholds in the north and west (specifically in Uttar Pradesh and Maharashtra). As former US House Speaker Tip O’Neill famously said, “all politics is local,” and that has never been truer in India.

At this stage, there are three big takeaways from this election: 1) Democracy is alive and well in India; 2) Indians want jobs, jobs, and jobs; and 3) the Indian voter will hold the government to growing the economy over religion. On the third point, it’s worth noting that the BJP is losing in Ayodhya, the site of the Ram Mandir, a temple the BJP fulfilled a campaign promise to build to replace a sixteenth-century Mughal-era mosque razed by Hindu groups in 1992. The site is considered to be one of Hinduism’s holiest sites and has been the center of Indian politics for decades.

The BJP struggled to translate its economic policies and benefits to the average voter. Coupled with a stronger anti-incumbency mood and operating under a coalition government, the BJP will need to work hard to maintain its position as India’s largest party. The BJP and its coalition government are now operating in a “now or never” moment.

Kapil Sharma is the acting senior director of the Atlantic Council’s South Asia Center.

The BJP came into the election overconfident. It leaves humbled.

The Indian elections were long, spread over six weeks, but they proved to be a thriller in the end. Early results show that the Indian voter decided to humble the mighty and restore balance. The ruling party has done worse than projected and the opposition alliance much better than expected. 

As vote tallies come in, it appears Modi’s BJP may not secure on its own the 272 seats needed for a majority in the 543-member Lok Sabha, the governing lower house. The BJP will be beholden to its allies, something the party has been able to avoid since Modi first came to power in 2014.

The reduced numbers are a far cry from an overconfident projection of four hundred seats by the BJP and its allies and a campaign centered around Modi’s personal appeal. In the end, a host of real issues—inflation, unemployment, rural distress, caste divides—mattered more than a slick message designed to project Modi not just as an Indian leader but as a global statesman. 

The opposition Congress party under Rahul Gandhi has made a spirited comeback with a campaign that emphasized economic issues over religious divides. Gandhi’s two yatras, or journeys, through huge parts of India listening to people and learning about their problems seemed to have resonated with voters. The performance is all the more significant given the uneven playing field—the Modi government is accused of using various ploys to hobble the opposition.

Shrunken and humbled, the BJP will still be able to form a government with Modi as prime minister for the third time, but the party’s allies will extract a bigger price for coming along. 

—Seema Sirohi is a columnist for the Economic Times.

After surprise results, Modi will need to govern more cautiously to keep his coalition together

Heading into his third term as prime minister, this election was marred for Modi by the unrealistic expectations that he set for himself—a target of four hundred parliamentary seats for the ruling National Democratic Alliance (NDA). NDA’s numbers have been diminished, as some parties have left the alliance—including Shiromani Akali Dal, which could have helped the NDA in Punjab, and the Shiv Sena, which could have added eleven more members of parliament (MPs).

This election has seen a close contest in Uttar Pradesh, a state that sends eighty MPs to the parliament. It witnessed the consolidation of minority voters and support for affirmative action, based on the opposition INDIA coalition’s narrative that the ruling NDA would change the constitution and end the reservation system, under which historically disadvantaged castes and communities receive quota-based jobs and educational opportunities.

The election also saw candidates intelligently align themselves in key constituencies, where the Samajwadi Party and Indian National Congress avoided direct clashes and made the BJP/NDA candidates sweat, especially in the eastern Uttar Pradesh and western Uttar Pradesh belt of Jats, which had substantial opposition to the NDA and BJP because of the controversial farm law proposals.

The BJP is still the single largest political party in the parliament, and the NDA coalition will return to power, as it has comfortably crossed the required majority of 272 seats in parliament. But Modi’s administration will be weakened by the pressures of running a coalition government and catering to demands based on regional mandates, which makes bold economic or political decisions long in the making. This may impact policy formulation and the financial investments by big corporations as well as the stock market, in the near term.

Modi may not be seriously impacted by the election results, nor is his image in the international arena likely to suffer. He will still be the prime minister and thus represent the government and India in international fora, but he will need to tread with caution to keep his coalition together.

—Ratan Shrivastava is a nonresident senior fellow at the Atlantic Council’s South Asia Center and managing director at Bower Group Asia. He previously served in the Indian Ministry of Defense.

Expect Modi to keep pushing back against the West on climate policy, while making changes at the local level

Modi and the BJP will garner another five years to implement their vision of Bharat with the assistance of coalition partners. Modi’s support appears firm, while the BJP experienced stronger regional challenges than expected.  

Voters seem satisfied with Modi’s efforts to elevate India on the global stage and with many of his policies for national economic growth. Viewed from the lens of climate change, the electorate appears content with Modi’s performance at the COP26 climate change summit in 2021—where Modi committed to reducing India’s carbon emissions to net-zero by 2070—and as president of the Group of Twenty (G20) last year. Constituents largely agree with Modi’s position that India needs balance in solving climate change and deserves an opportunity to develop like Western nations. I expect to see Modi double down on this position and work with the developing nations grouping known as the BRICS to deflate pressure from the West. Modi will flex more on global climate change, arguing that sustainability encompasses poverty alleviation and economic opportunity as much as environmental stewardship.

But Modi cannot ignore the fact that his party lost ground in this election. Modi’s support as a strongman facing the rest of the world may be intact, but the BJP’s strong-arm approach domestically seems to have made the electorate wary. The climate corollary is that, while India’s international stance on climate change is popular, the BJP’s approach at the local level has been less effective (notwithstanding the borderless nature of most pollution). Constituents do not seem to be able to connect the dots on how BJP climate policies benefit them. The air is still polluted, clean water remains scarce, heat is reaching unlivable levels, and climate catastrophes keep occurring. To shore up his party, Modi likely will start connecting these dots by promoting new, farmer-friendly alternatives to burning crop residues, doing more on water recycling and floodwater detention/retention, and making lower-carbon cooking fuels more accessible. Look for new programs, or revamping of existing programs, in these areas.

Shék Jain is a nonresident senior fellow at the Atlantic Council’s South Asia Center and chairman of the Pura Terra Foundation.

Factionalism split India’s political parties—and their voters

Despite India’s massive scale, Indian national elections are largely local. More accurately, these elections are contested on a regional level. Recognizing these regional issues is crucial to understanding the national result. For example, the increasing political factionalism at the regional level split the loyalty of politicians and voters alike. In various regions, political parties from across the ideological spectrum have split into opposing factions or allied with ideologically unaligned parties—running with the BJP to hold onto power or teaming up with the rest of the opposition to topple the BJP. Amid the factionalism, the BJP has relied largely on Modi to sway voters.

To understand the complexity, consider just one state, Maharashtra. Maharashtra’s politics since the state’s formation in 1960 have been eccentric and eclectic to say the least—with only one chief minister (the equivalent of a governor in the United States) having completed a full five-year term. Four major parties ran in Maharashtra in the 2019 elections. Over the years, two of these parties split, resulting in different factions of them being simultaneously in government and opposition. As the results come in, the BJP and the Congress party are leading in Maharashtra, but in third and fourth place are the surviving factions of the broken parties running against the BJP. In Maharashtra and several other states, factionalism worked to secure power for the BJP by bringing together diametrically opposed right-wing and left-wing parties, but this method has not received validation from the Indian voters in Maharashtra as the results of this election cycle show. 

Maharashtra is only one example, and political factionalism is only one topic that has trended in India in the last five years. The results show that Indian citizens have paid attention to the regional issues affecting tens and hundreds of millions—political factionalism, women’s rights, employment, government employment in all sectors including the military, communal strife, controversial legislation, caste discrimination, and regional discrimination. 

Srujan Palkar is a program assistant at the Atlantic Council’s South Asia Center.

India’s democracy is alive and kicking

India’s election results held a surprise that very few expected. Modi is expected to become the prime minister for a third consecutive term, unless there are any last-minute surprises or changes in coalitions, which cannot be ruled out—stranger things have happened in Indian democracy. Yet, this victory should feel like a setback for Modi. He gave a clarion call for his coalition to get four hundred seats. However, his coalition is struggling to gain even three hundred seats and his party is falling short of an absolute majority. The BJP has won, but it’s a victory of a different kind. The Congress party is celebrating, despite winning only around one hundred seats in the parliament. But for them, it’s a defeat that must feel like a victory, since they performed much better than expected. 

However, the key takeaway from this election is that India’s democracy is alive and kicking. It is a myth that the Indian economy and polity thrives under especially strong majority governments. Some of India’s biggest economic reforms happened under the coalition governments of the 1990s and 2000s. This result, in which the BJP will need to form a coalition to govern, should give us hope.

India has a parliamentary form of government, which some say was slowly turning into a “prime ministerial” form of government (with power concentrated in the executive). These election results will give back some of the power to the legislature. 

We can expect India’s parliament and parliamentary committees to become more active, with more bills being debated and deliberated. This is also a vote that shows that the Indian electorate does not cast its votes based on singular issues. Regional issues cannot be neglected, every vote needs to be earned, and overconfidence can be lethal. The best politics is building an economy that works for everyone—these elections have reminded us of this fact. The country will see policy continuity, but with checks. India will have the strongest opposition it has had in the past ten years, but a decisive leader still at the top.

Both sides may claim victory based on these surprising election results. But India’s democracy has been the biggest winner in these elections. And that is the best outcome we may have asked for.

Adnan Ahmad Ansari is a nonresident senior fellow at the Atlantic Council’s South Asia Center and associate vice president at the Asia Group.

The BJP won, but uncertainty has been introduced to the picture

The election results are a surprise given the predictions going into the vote count. The results reinforce the difficulty of gathering such polling data around the world. Exit polls and media reports from across the country had set the expectation of a massive win—and perhaps even an absolute majority—for Modi and his ruling BJP.

The BJP did win, but by a significantly smaller margin than many predicted. Instead of looking at an absolute-majority rule, the BJP appears headed for a return to coalition politics. This surprise creates political and policy uncertainties that will have at least short-term consequences. A reversal of the sort of investments and capital expenditure that the government has advanced in recent years, in favor of a return to subsidies, protectionism, and welfare programs, is unlikely. But uncertainty has been introduced into the picture. Policy and political decisions will likely be delayed. Industry, particularly multinational corporations, and partner governments may hold off on some decisions as they wait and see how the new government develops.

Among the sectors least affected could be the technology sector, particularly software and services. This is because the ruling parties, throughout the past several decades, have all seen the tech sector as a growth engine for the economy, exports, and jobs. In contrast, infrastructure, agriculture, and large banks are among those that face questions about the shape and impact of potential policy changes.

Jeff Lande is a nonresident fellow at the Atlantic Council’s South Asia Center, president of the Lande Group, and senior advisor to Conlon Public Strategies.

Indian voters just proved the axiom that “all politics is local”

Listening to the speakers at a recent business conference in India, as I did recently, one would never have predicted the election results announced today in India. Business and government leaders spoke about export-driven growth, artificial intelligence, advanced manufacturing, and ambitious visions for India over the next twenty-five years. But every so often, election results prove that voters are not necessarily as monolithic or unsophisticated as elites may think them to be. Clearly, it was what the chief executive officers and ministers did not speak of—income inequality, local development, and the fabric of society—that was on the minds of voters.

India is at an important transition point that will make life difficult for any leader. The prime minister, MPs, and business leaders should be speaking about India’s emerging role on the global stage. They should be positioning India in the Quadrilateral Security Dialogue as a leader on climate change and investing in emerging technologies.

And the BJP was rewarded for strong stewardship of the economy over the past ten years. India’s hard infrastructure—roads, bridges, and airports—have all improved significantly. Electricity and clean water are far more accessible than before. And the tough implementation of economic reforms, such as the goods and services tax and digital public infrastructure, are rapidly bringing millions of people into the formal economy.

But, as the US politician Tip O’Neill famously said, “all politics is local.” Despite strong overall economic growth, the real numbers are more complex. After subsidy adjustments, the growth rate is really closer to 6 percent. Growth remains concentrated in the south and west. Pollution and extreme heat are unbearable for large portions of the year in Delhi. And India still has nearly two hundred million people living below the global poverty line of $1.25 a day. 

This wasn’t a Hindutva election. It was not an embrace or rejection of the BJP’s majoritarian agenda. Instead, it was the type of pushback that voters around the world often provide when politicians and business leaders lose sight of the important issues in front of them.   

 Nish Acharya is a nonresident fellow at the Atlantic Council’s South Asia Center.

A surprising election verdict puts the BJP on notice

While vote counting is ongoing, the BJP has won significantly fewer seats than expected. This national poll was, first and foremost, a referendum on Modi and his populist policies. After all, the BJP ran a presidential-style campaign with its charismatic leader front and center.

The party is still on track to remain by far the largest in the lower house, but its results fall well short of expectations. Nevertheless, voters seem comfortable with Modi and much of his agenda—the BJP’s vote share may prove to be comparable to 2019. Indians also appear keen to voice their concerns over economic distress and rising inequality.

Under Modi’s reign, the country has begun to witness robust economic growth after uneven progress during the pandemic. The economy grew at 8.2 percent in the fiscal year ending March 31, and the International Monetary Fund forecasts that it will grow by 6.8 percent in 2024 and 6.5 percent in 2025. India’s hard and digital infrastructure has improved, as well.

The problem is most Indians have not adequately participated in the fruits of an economy with gaudy headline numbers. Growth is unequal, and jobs are few and far between. Unemployment was the top concern for 27 percent of respondents in a recent poll. Against this backdrop, it’s not difficult to understand why both domestic consumption and investment are tepid.

In these elections, the BJP appealed to the religious identity of India’s Hindu majority, while Congress cautioned that a BJP landslide would result in changes to the constitution, removing exceptions afforded to the historically marginalized. Building temples, no matter how grand, doesn’t put food on tables. To address everyday concerns, Modi has accelerated welfare support, but at the cost of reducing already low public investment in education and health.

The surprising partial results begin to puncture Modi’s aura of invincibility, chip away at the BJP’s dominance, and breathe new life into Congress. The BJP still casts a large shadow over Indian politics, but it lacks a policy mandate. 

Coalition governments require compromises. That reality could complicate any plans for ambitious structural reforms on land, labor, or opening India’s markets to unfinished and intermediate inputs. 

Despite the skittish reaction from equity markets, a governing coalition could lead to a sustained period of strong economic growth, like in the 1990s and 2000s. Additional consultation, while perhaps slowing reforms, promises to strengthen the health of India’s democracy. 

Until now, most questions about succession and party leadership have been pointedly directed at Gandhi, the sometimes-reluctant leader of India’s most storied political family. While it is hard to imagine anyone filling Modi’s shoes, there will likely be more open discussion about who in the BJP succeeds the seventy-three-year-old. 

Voters have once again defied expectations and, once more, confirmed the resiliency of India’s democracy. So close to solidifying his status atop the list of the world’s most popular democratically elected leaders, Modi must now rely on kingmakers to help determine the BJP’s future.

Atman Trivedi is a nonresident senior fellow with the Atlantic Council’s South Asia Center and partner at Albright Stonebridge Group, where he leads the firm’s South Asia Practice. He previously worked on US-India affairs in the US Commerce Department, the US State Department, and for then US Senate Foreign Relations Committee Chairman John Kerry.

Further reading

Related Experts: Kapil Sharma, Atman Trivedi, Srujan Palkar, Shék Jain, and Adnan Ahmad Ansari

Image: India's Prime Minister Narendra Modi shows his ink-marked finger after casting his vote, outside a polling station during the third phase of the general election, in Ahmedabad, India, May 7, 2024. REUTERS/Adnan Abidi .