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India’s Prime Minister Narendra Modi is set to win a historic third term in office after a partial vote count published on Tuesday showed his Bharatiya Janata party and its partners on course to win re-election, albeit with a smaller majority.
As of early Tuesday afternoon, the BJP and its National Democratic Alliance allies were ahead in at least 293 of 543 seats in India’s lower house, allowing it to secure a third five-year term and form the next government.
Early trends showed the opposition INDIA alliance, led by the BJP’s arch-rival the Indian National Congress, performing better than expected and winning 229 seats.
The prospect of a reduced majority for the ruling party prompted a sharp sell-off in Indian stocks. The benchmark Nifty 50 index tumbled as much as 8.5 per cent, erasing its gains for the year, after having surged to a record high on Monday following exit polls that had indicated Modi would win the election comfortably.
The exit polls released over the weekend after the end of voting had projected the ruling alliance to win between 353 and 401 seats. During the campaign, Modi and the BJP forecast the NDA would win as many as 400 seats.
If confirmed, Modi’s victory would make him India’s first prime minister to serve three consecutive terms since independence leader Jawaharlal Nehru and empower him to continue his project of reshaping politics, the economy and society in the world’s most populous country.
However, a smaller majority would make the powerful Indian leader more beholden to his smaller allies in the NDA than before.
“If the numbers don’t change, it’s a return of alliance politics that had characterised India from 1989 to 2014,” said Pratap Bhanu Mehta, senior fellow at the Centre for Policy Research in New Delhi. “In that sense, it will have to be a much more negotiated government.”
He added: “I’m not sure how much business will like it.”
The stock market fall was driven by a sell-off in companies related to infrastructure, a critical policy initiative under the BJP. Shares of Adani Ports, Adani Enterprises and Oil and Natural Gas Corporation led losses, dropping as much as 25 per cent, 25 per cent and 21.5 per cent, respectively.
Many Indians had expected a clear Modi victory in an election seen as a referendum on his decade in office and following a campaign focused largely on the personality of the 73-year-old prime minister.
But early voting trends on Tuesday showed the BJP on track to fall short of a parliamentary majority of 272 on its own, which it enjoyed during Modi’s first two terms. The party was also projected to lose some seats in its northern Hindi-speaking political stronghold, including the most populous state Uttar Pradesh.
Final results are expected late on Tuesday evening or Wednesday morning. Results were the culmination of a staggered six-week polling process that began in April.
Voting in India is held in phases due to the logistical and security challenges in a country of more than 1.4bn people. The Election Commission of India said 642mn of nearly 1bn registered voters cast their ballots.
Additional reporting by William Sandlund in Hong Kong