Modi’s landslide, the most resounding election victory India has seen in 30 years, was welcomed with a blistering rally on India’s stock markets and raucous celebrations at offices across the country of his Bharatiya Janata Party (BJP).
The BJP looked certain of a parliamentary majority, giving the 63-year-old former tea-seller ample room to advance reforms started 23 years ago by current Prime Minister Manmohan Singh but which stalled in recent years.
Singh’s Congress party suffered its worst ever wipeout, a big boost to Modi’s goal of ending the dominance of the Nehru-Gandhi dynasty that has governed for most of the 67 years of independent India.
Crowds surged around Modi’s car after he visited his mother’s home in the western state of Gujarat. He sent a message saying “India has won,” that instantly set a record as the country’s most retweeted Twitter post.
With more than six times the seats of its closest rival, Modi’s is the most decisive mandate for any leader since the 1984 assassination of Indira Gandhi propelled her son to office. Since 1989, India has been governed by coalitions.
The BJP was winning in 278 seats of the 543-seat parliament, counting trends showed. An alliance led by the party was ahead in 337 seats.
Indian markets got off to a roaring start, with the rupee breaking below 59 to the US dollar, an 11-month high, and the benchmark stock index jumping 6% to a record high before paring its gains.
Betting on a Modi win, foreign investors have poured more than €11.7bn into Indian stocks and bonds in the past six months and now hold over 22% of Mumbai-listed equities — a stake estimated by Morgan Stanley at almost €205bn.
Unlike his predecessors, Modi will not have to deal with unruly partners as he implements reform. That could usher in profound economic changes, and he will try to replicate his success in attracting investment and building infrastructure in Gujarat, the state he has governed for more than 12 years.
“He can afford to have a smaller but stronger cabinet, that means a far more decisive government. He has been saying less government and more governance, we are really likely to see that,” said Navneet Munot, chief investment officer at SBI Funds management in Mumbai.
But with India’s economy suffering its worst slowdown since the 1980s and battling high inflation, it will not be an easy task to meet the hopes of millions of Indians who have bought into the idea that Modi will quickly push their country onto the top table of global economic powers.
“It’s important to be realistic about how quickly they can instigate change. It takes time to, number one, get economic reforms through the political machinery, and number two, it also takes a while before economic reforms actually have a positive impact,” said Leif Eskesen, an economist at HSBC in Singapore.
India’s election was the world’s largest ever. Staggered over five weeks, a record of more than 500m ballots were cast from the Himalayas in the north to the tropical south, with voters braving blistering heat for a record 66% turnout.
Since being named as a candidate last September, Modi has flown 300,000km and addressed 457 rallies in a slick, presidential-style campaign that broke the mould of Indian politics.
Modi contrasted his humble roots with the cloistered life of privilege of his dynastic rivals. He ran circles around his slow-footed opponent Rahul Gandhi, 43, from the Congress party which his family has dominated since his grandfather Jawaharlal Nehru led India to independence from Britain in 1947.