India election 2024: Modi loses majority

The India election results are in and Modi suffered a big political setback. What does the future hold for the country?

India Election Results in New Delhi
(Image credit: Bloomberg / Contributor)

Voters in India have given prime minister Narendra Modi his “biggest political setback in his decade of power”, delivering a split result in the country’s general election, says the Financial Times. In an “unexpected blow”, Modi’s BJP party lost its majority for the first time since 2014, winning only 240 out of 543 seats in India’s lower house, down 63 from five years ago. 

In contrast, the opposition INDIA bloc, led by the Indian National Congress, performed better than expected, winning 234 seats. Modi plans to form a government with smaller parties in his National Democratic Alliance. 

Is India’s economy worse-off? 

So much for the BJP’s “confident swagger” at the start of the campaign that it would win 400 seats, says Hannah Ellis-Petersen in The Guardian. Pundits too considered Modi’s return to power with a majority “as almost an inevitability”, with exit polls projecting a BJP landslide. 

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The opposition seemed to have captured “widespread frustrations” among the masses – particularly in poorer rural areas – at “chronic unemployment, low wages and high inflation”. In contrast, the BJP’s “increasingly polarised messaging seeking to play on Hindu-Muslim divisions” seems to have failed to distract from the “government’s failure to create quality jobs, particularly for the vast youth population”. 

It’s not surprising Indians are wondering “where the results are”, says The Wall Street Journal. While India officially grew by 8% in the last fiscal year, private consumption and investment are much lower and national unemployment is 8%, rising to 17% in cities – poor results given India’s “natural advantages”. 

Worse, rather than offering voters “a vision for escaping this malaise”, Modi instead “touted various handouts such as food subsidies introduced during the pandemic”. Still, while voters have shown that they want him to “do better”, the question now will be “whether Modi takes this election warning to heart, or retreats into even more sectarian and authoritarian methods”.

What do the results mean for India’s democracy?  

There is a “danger” that Modi will double down on his more authoritarian tendencies and amplify his polarising rhetoric, says The Economist. Still, the fear that India “might inexorably evolve towards a more autocratic form of government has receded”, given that the BJP failed to win enough seats to ram through constitutional changes and the opposition parties have been given “a new lease of life”, with debate and dissent “reinvigorated”. 

Modi’s “dimmed” personal brand makes the idea of him ruling for another 10 years seem far less likely. Modi is “confident” he will be able to negotiate a deal to stay in power, claiming that his alliance still has a “mandate” to govern, but even this is not a total certainty, says Bloomberg

While the BJP-led coalition has “secured enough seats to form a government if it sticks together”, leaders of the two small “kingmaker” parties within it that Modi will need to woo “have a history of switching sides”. They are already being courted by the opposition, which is even open to one of them becoming prime minister. Agreeing the terms of a deal “may not be straightforward” – Modi may yet face a “reckoning” and have to make concessions.


This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription. 

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri