India’s prime minister Modi suffers defeat in Bihar election

Prime minister Narendra Modi suffered a heavy defeat yesterday in an election in Bihar, India's third most-populous state, signalling the waning power of a leader who until recently had an unrivalled reputation as a vote winner.

Mr Modi’s second straight regional election setback will galvanise opposition parties, embolden rivals in his own party and diminish his standing with foreign leaders amid concern he may not win a second term as prime minister.

"This is a clear indication that Modi's popularity may now have peaked," said Satish Misra, a political analyst at the Observer Research Foundation.

The loss in Bihar will also hamper Mr Modi’s push to pass economic reforms, because he needs to win most state elections in the next three years to gain full control of parliament.

Markets

Investors are already fretting over the speed of change in Mr Modi's India, and worries over an additional stumbling block will likely knock financial markets on today.

In the most significant vote since he won power 18 months ago, Mr Modi's Bharatiya Janata Party (BJP) lost in Bihar after running a campaign that sought to polarise voters along caste and religious lines.

It was the most expensive state election ever fought by the BJP, with more than 90 top party figures addressing 600 rallies over the last six weeks, party officials said.

"The Bihar election was a very important battle for us. We will have to analyse each and every aspect of the result," said Ram Madhav, a BJP general secretary. "There are lessons to be learned."

According to tallies compiled by the election commission, an anti-Modi alliance, led by chief minister Nitish Kumar, was ahead in 179 seats in the 243-seat regional assembly, an overwhelming majority.

Mr Modi tweeted that he called to congratulate Mr Kumar, whose regional “grand alliance” could now become a template for politicians seeking to prevent Mr Modi’s march towards untrammelled power under India’s federal system.

The defeat could also dampen the mood as Mr Modi heads to Britain for the first bilateral visit by an Indian leader since 2006. – (Reuters)