Skip to content

India’s Modi emerges weakened

Unlock Editor’s Digest for free

The world’s largest democratic exercise has ended, with an unexpected twist. Some 642 million Indians cast their votes in the seven-phase poll that lasted several weeks amid a heat wave. Bharatiya Janata Party leader Narendra Modi announced Tuesday, as expected, that he would return for a third consecutive term, the first such hat-trick since independence Prime Minister Jawaharlal Nehru. But he returns humiliated.

He BJP is on its way will lose its own absolute majority and, together with its allies, will occupy fewer seats in India’s lower house than in 2019, well short of the resounding victory that exit polls suggested. It leaves Modi weakened and further beholden to coalition partners and the opposition. Companies and investors were confident in continuity and a stronger majority. Stocks, bond prices and the rupee fell.

However, the surprising result could prove favorable for the long-term development of the world’s most populous nation and the fastest-growing major economy. In fact, if it encourages the arrogant, Hindu nationalist BJP to engage in more deliberative policymaking and enlivens Indian democracy, just when many feared it was flickering, it could strengthen the country’s rise.

Winning a historic third term shows that Modi remains popular. Many Indians still approve of his decade-long leadership. Since his first term in 2014, road, rail and energy infrastructure has boomed across the country, India has created a digital welfare state and the nation’s confidence on the global stage has increased. But this vote shows that Indians want more from their government.

Despite impressive reductions in poverty, income and wealth inequality are between the highest in the world. Indians are worried about lack of jobs and high inflation. The BJP must now address these core issues, along with its grand vision of making India a developed country by 2047, if he wants to remain in power. Clearly, efforts to amplify Modi’s politics chaiwalaThe world leader-turned-world leader image, reinforcing Hindu nationalism and increasing polarization (all evident during the campaign) have produced diminishing results at the polls.

Line chart of nominal GDP, trillion dollars, market exchange rates showing India's growing influence

For the BJP, the vote is also a wake-up call that it cannot block dissent. and govern effectively. On the last decade, the party and its supporters have muzzled the free press, intimidated its opponents and discriminated against Muslims. Any fears that the BJP could win a two-thirds majority, which would allow it to also amend the Constitution, have now also been dispelled. The opposition, despite divisions, made progress, underscoring growing discontent.

The election result is likely to slow down some of the BJP’s economic reform agenda. But it is also an opportunity to resolve underlying tensions, which can lay a firmer foundation for India’s rise. To do this, the BJP will need to work with other parties to ensure that India’s growth is more inclusive. That means improving education, empowering more women to enter the workforce, and undertaking liberalizing market reforms, which should be supported across the political spectrum.

If it wants to better respond to the needs of all voters, the BJP must also reverse its democratic retreat. That means encouraging, not hindering, independent media, ending discrimination against Muslims, and investing in credible national statistics. A more transparent and peaceful India only increases its investment attractiveness.

A strong and democratic India is important for its people and for the world. The nation has one of the largest and youngest workforces, its consumers are already a major market, and multinationals see India as critical to “China plus one” supply chain strategies. Voters have also shown that their democracy is resilient. Over the next five years, a weakened Modi can still help realize India’s vast economic potential, but only if he gets the right message from these polls.