Modi's BJP-led alliance projected to win parliamentary majority in India's election, exit polls show

India's Prime Minister Narendra Modi looks set for a rare third consecutive term in power, as local exit polls on Saturday suggested his Bharatiya Janata Party-led alliance will clinch a parliamentary majority.

According to an exit poll summary by local news channel NDTV, the BJP-led National Democratic Alliance is expected to secure around 365 out of the 543 seats in the lower house of parliament. The party or coalition that wins at least 272 votes will form the government. Final results, expected on Tuesday, can diverge from exit poll projections.

If the exit polls, which have a patchy record, are confirmed, Modi will serve for another five years as the country's prime minister — a position he has held since 2014.

India's vote, the world's largest democratic election polling just under a billion eligible voters, panned out in seven phases over the last six weeks and started April 19. There are a total of 543 contested seats in the lower house, and the party or coalition that wins at least 272 votes will form the government.

Under Modi's decade-long reign, India has witnessed robust economic growth and a leap in its global reputation. Home to 1.4 billion people, India has one of the fastest growing economies in the world, which expanded 7.2% in the fiscal year 2022-2023 — achieving the second-highest growth rate among the G20 countries. The International Monetary Fund projects that India's economy will grow 6.8% in 2024 and 6.5% in 2025, compared to China's predicted growth of 5% in 2024 and 4.5% in 2025.

Some economists are even more optimistic. "The larger you grow, the more difficult it becomes to sustain a very high level of growth, but I think 7%-7.5% growth is possible to achieve," Sujan Hajra, chief economist at Anand Rathi Share and Stock Brokers, told CNBC adding that improving infrastructure will be a big priority to boost growth.

"Soft infrastructure such as improving the country's health care network will get significantly more emphasis this time around as compared to the hard infrastructure because a lot of work has already been done on that," Harja said.

In the BJP's manifesto for the upcoming term, Modi pledged that his government will propel India to become one of the world's top three economies, aggressively fight poverty, open up new avenues for growth and tackle corruption. 

Despite the optimism global leaders have about India's growth trajectory under Modi's rule, observers and critics have warned that the prime minister's third term in office could bring about more signs of a democratic backslide. He has also been accused of hate speech for calling Muslims "infiltrators" at a rally days after voting began. The religious divide in India continued to be a hot button topic during the election, as well as unemployment. 

According to a survey conducted by the Centre for the Study of Developing Societies, unemployment was the top concern for 27% of the 10,000 surveyed. More than half (62%) of those surveyed also said it had become more difficult to find a job in the last five years during Modi's second term.

Modi reportedly said in March that he was confident the BJP and the wider National Democratic Alliance would secure a total of 400 seats, but analysts say that's less likely to matter as long as he is close to the 303 seats he clinched in 2019.

"It will still be a very positive outlook for the Indian equity market as we've seen the type of progress and efficiency that he's been able to bring from a governance perspective since 2019 with 303 seats," said Malcolm Dorson, a senior portfolio manager and head of emerging markets strategy at Global X ETFs.

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