Is India souring on Modi?

After sweeping into power in 2014, Indian Prime Minister Narendra Modi and his party may now be losing popularity, as his Bharatiya Janata Party (BJP) suffered a significant state election loss on Sunday.

Modi conceded defeat to Nitish Kumar of the Janata Dal United party, after early tallies showed Mr. Kumar leading 180 to 63 in Bihar, the country’s third largest state.

Modi did not run in the election, but as the BJP's leader he campaigned heavily in the state over the last several months on promises of economic reform and by stirring nationalist and religious sentiments – the same tactics that helped gain him power just 18 months earlier.

But by late afternoon it became clear those efforts were in vain, and Modi posted a congratulatory message on his Twitter feed.

During his tenure as Bihar's chief minister for most of the last 12 years, Kumar has gained his own reputation for economic development in Bihar, one of India's poorest states, where about 30 percent of the state's 100 million residents live on less than $2 a day.

Modi won BJP’s largest parliamentary majority in 2014 with promises of drastic economic change, but his loss on Sunday could be a sign that the prime minister’s power may already be slipping.

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

In many ways, Modi staked his name on Bihar’s elections, often touring India’s northeastern state and attending more than two-dozen rallies in support of the BJP since August.

His party’s defeat may signify a shift away from Modi’s politics that many have condemned for using religion and the caste system to stir up nationalist feelings. Modi’s loss is a referendum against Hindu-centric policies bordering on racism, critics say. About 20 percent of Bihar’s population is Muslim.

Kumar’s victory may also be an indication of more ubiquitous political troubles that could have far-reaching economic results.

“Modi must keep his members in check or risk losing domestic and global credibility,” a representative of Moody’s Analytics said to Reuters.  

The defeat could also make passage of Modi’s economic policies and tax reform proposals more challenging. BJP holds a minority in the Indian Parliament’s Upper House, and its members are elected by state legislatures. This arrangement leaves the possibility that Modi’s other political adversaries could follow Kumar’s lead, The Wall Street Journal reports. Five state elections are set for 2017 in regions where Modi’s party has had weak showing, according to Reuters.

“You could see a movement toward new political alignments in the opposition,” said E. Sridharan, academic director of the University of Pennsylvania’s Institute for the Advanced Study of India, to Reuters.