New Delhi, November 8

Indian Prime Minister Narendra Modi suffered a heavy defeat today 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.

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 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.

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

In the most significant vote since he won power 18 months ago, Modi’s Bharatiya Janata Party 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.”

An anti-Modi alliance led by Chief Minister Nitish Kumar was ahead in 179 seats in the 243-seat regional assembly, an overwhelming majority, tallies compiled by the election commission showed.

Modi’s campaign started with a message of economic development, then, as the race began to tighten, his party shifted to appealing to caste and religious alliances.

The slaughter of cows, an animal revered by the majority Hindus, became a major topic.