Indian Prime Minister Narendra Modi convened with his allies on Wednesday to strategize on forming the government, following a surprising election outcome where his Hindu nationalist party fell short of an outright majority in parliament. The Bharatiya Janata Party (BJP), led by Modi, secured 240 seats in the general election, 32 seats shy of the required majority in the 543-member lower house.

The election result rattled investors, prompting a steep decline in stocks, as Modi now faces the challenge of cobbling together a coalition with disparate regional parties, whose allegiances have been uncertain over time. Despite the setback, the National Democratic Alliance (NDA), spearheaded by the BJP, clinched 293 seats, surpassing the 272 needed to form a government.

Media outlets observed a perceptible dimming of Modi's political shine, with headlines reflecting the unexpected outcome. Modi's personal victory in Varanasi, a revered city for Hindus, was less resounding than in previous elections, indicating a narrower margin of victory.

However, Arvind Panagariya, chairman of a government finance panel, opined that the reduced majority in parliament does not necessarily imply reform stagnation. He expressed confidence that despite the challenges, implementing necessary reforms remains feasible and could bolster the government's position in the long run.

On the opposition front, the INDIA alliance, led by Rahul Gandhi's Congress party, surpassed expectations by securing 230 seats, with Congress alone winning 99 seats, nearly doubling its 2019 tally. This unexpected surge is anticipated to enhance Gandhi's political stature. Nevertheless, the opposition's prospects for government formation face hurdles, as two of the BJP's crucial allies reaffirmed their support for Modi, affirming the continuity of their pre-election alliance.

In a speech to jubilant party workers at the BJP headquarters, Modi pledged renewed dedication in his third term, buoyed by the public's endorsement. He expressed gratitude for the continued support and vowed to redouble efforts in addressing the nation's challenges.