Modi claims a historic 3rd term but his power is thrown into uncertainty

• Indian Prime Minister Narendra Modi claims he won a third term as the country's leader.
• His party is now scrambling to find allies to form a government.
• It's the result of a six-week election that saw a bitter feud emerge between the BJP and its rivals.

June 4, 2024, 10:55 a.m. ET: This story has been updated to reflect Narendra Modi's claim of victory.

Narendra Modi claimed victory as India's prime minister for a rare third term in office, but his future hangs in the balance.

Modi's Bharatiya Janata Party (BJP) failed to secure an overall majority of its own, according to figures from the election commission. His party is now scrambling to find allies to form a government.

"People have placed their faith in NDA (National Democratic Alliance) for a third consecutive time," Modi said. "This is a historical feat in India's history."

A coalition created by Modi's main rival, the Indian National Congress, performed better than expected, mounting a strong challenge to the incumbent.

The opposition leader, Rahul Gandhi, said Tuesday his party may hold talks to try to form its own governing coalition. 

But Desam Party (TDP) and Janata Dal (United), who were part of a pre-election coalition with the BJP, said they endorsed Modi for a third term Tuesday, reported Reuters. This was in response to reports that the opposition would seek to prise them away from the BJP.

The final votes were cast on Saturday in the seventh phase of the election, which saw people in eight of India's 36 states and territories take their turns at the ballot.

Modi had expected a landslide

Modi and the BJP had long been projected to win decisively. Exit polls, though sometimes inconsistent, showed the party extending its control of the lower house.

Modi had set a goal for his BJP-led alliance to secure 400 seats, up from about 350 won in 2019.

The incumbent was so assured of being re-elected this year that he declared victory on social media three days before the official results were scheduled to be announced on Tuesday.

"I can say with confidence that the people of India have voted in record numbers to reelect the NDA government," he wrote on X.

In January, at the World Economic Forum in Davos, Indian officials struck a similarly confident note.

Hardeep Singh Puri, India's minister for oil and gas, told Business Insider that Modi would likely get "15 to 20%" more seats than in 2019.

"I think we were 303 last time," he said. "So it should be 343-45 but it's a process that is still beginning."

"The opposition is in disarray, he added.

India's rapid growth has attracted the attention of corporate leaders such as Elon Musk, Jamie Dimon, and Tim Cook.

"I think most investors have read the tea leaves and have realized that some of the political stability and predictable policies that they expect…when it comes to making investment decisions, is likely to be available in India," said Rajesh Kumar Singh, a top official in India told Business Insider in Davos in January this year.

On Tuesday, Indian stocks had their worst day in more than four years as stability looked less likely. This was a day after the stocks hit record highs following a poll showing Modi's landslide victory.

A bitter battle for power

The six-week election involved a bitter feud between the BJP and its main opposition, the Congress Party.

The Congress Party has formed its own bloc with about 20 opposition groups to oust Modi, campaigning on promises to relieve the nation's unemployment woes. However, the new alliance is undermined by differences in ideologies and contested leadership.

Modi, a polarizing but popular leader, has spent much of the election blasting the Congress and its promised policies in controversial attacks. At one point, he accused the opposition of planning to take India's wealth and redistribute it to the Muslim minority.

While not specifically criticizing Muslims in his rally speeches, he's used terms such as "infiltrators" that are widely believed to allude to the minority.

His party's ideology, Hindutva, promotes building a Hindu nation and has been criticized as a nationalist movement that foments hate speech and right-wing extremism.

BJP's rivals have also accused the party of attempting to stifle opposition leaders. Delhi's chief minister, Arvind Kejriwal of the Aam Aadmi Party, was recently arrested on corruption charges related to handing out liquor licenses. Kejriwal was granted bail until the end of the election.

India's voting population is the world's largest, with 969 million people eligible to cast their ballots. That's more than twice the entire population of the European Union.