New Delhi – In a pivotal development on Wednesday, a significant ally of Indian Prime Minister Narendra Modi pledged unwavering support, significantly enhancing his prospects of securing a record-equalling third term in office. This follows a surprising election outcome in which Modi’s Bharatiya Janata Party (BJP) lost its outright majority in parliament.
The BJP secured 240 seats in the general election, falling short by 32 seats of the 272-seat majority required in the 543-member Lok Sabha, India’s decision-making lower house. As a result, Modi will need to rely on the National Democratic Alliance (NDA) partners to form the government.
In a statement that boosted Modi’s chances, the Telugu Desam Party (TDP), a key regional player from Andhra Pradesh, reaffirmed its support. “We are with the NDA. I will be attending the meeting in Delhi today,” TDP leader Chandrababu Naidu told reporters.
With the TDP contributing 16 seats and other allies making up the rest, the NDA’s combined tally reached 293 seats, comfortably surpassing the threshold needed to form a government. Despite this, the BJP’s standalone performance, limited to 240 seats, rattled investors and raised concerns over the future of the government’s reform agenda.
Financial markets reacted negatively to the election results, with stocks falling sharply on Tuesday. Analysts expressed worries about Modi’s dependence on various regional parties, known for their shifting political loyalties. Fitch Ratings agency noted that while the reduced majority could challenge more ambitious reforms, broad policy continuity was expected. The government is anticipated to maintain its focus on capital expenditure, ease of doing business measures, and gradual fiscal consolidation.
Modi’s victory in his stronghold of Varanasi was notably less commanding than in the 2019 elections, with his winning margin dropping from nearly 500,000 votes to just over 150,000. This result, combined with the overall diminished majority, led to headlines like the Indian Express’s “India gives NDA a third term, Modi a message.”
However, experts believe that reform paralysis is not inevitable. Arvind Panagariya, chairman of a government finance panel, argued in the Economic Times that necessary reforms remain feasible. “Delivering sustained growth at [an] accelerated pace can only strengthen the government’s hand in the coming years,” he wrote.
The opposition INDIA alliance, led by Rahul Gandhi’s Congress party, exceeded expectations by winning 230 seats. Congress itself nearly doubled its 2019 tally, securing 99 seats. This surge is likely to bolster Gandhi’s political standing.
Despite the opposition’s gains, the BJP’s key allies have reaffirmed their pre-poll alliances, complicating any potential efforts by the opposition to form a government. Both the BJP and the INDIA alliance were set to meet in New Delhi on Wednesday to discuss their future strategies.
Addressing enthusiastic supporters at BJP headquarters on Tuesday evening, Modi pledged to work even harder in his third term. “The blessings of the people for the third time after 10 years boost our morale, give new strength,” he declared.
As the political landscape reshapes, Modi’s ability to navigate coalition politics will be critical in determining the trajectory of India’s governance and reform agenda.