Narendra Modi sworn in as Indian prime minister for third term

Narendra Modi has been sworn in as India’s prime minister for a historic but unexpectedly constrained third term, after a relatively weak election performance that will leave him dependent on coalition allies in the world’s biggest democracy.

Thousands of dignitaries, including regional leaders such as Bangladesh’s Sheikh Hasina, Indian billionaires Gautam Adani and Mukesh Ambani, and Bollywood megastar Shah Rukh Khan attended the ceremony on the lawn of the president’s residence in New Delhi. A smiling Modi bowed to the throng, before taking the oath of office as the crowd chanted his name.

While Modi is India’s first leader to secure a third straight term since independence premier Jawaharlal Nehru, his Bharatiya Janata party lost 63 seats in the lower house in India’s six-week election, dramatically undershooting exit polls forecasting a landslide victory.

The BJP was shorn of its outright majority and left leaning on the 14 regional parties in its National Democratic Alliance. It marks the biggest blow to Modi during his decade in power, and he has since made unusually conciliatory comments about ruling through consensus.

Sunday’s pomp followed days of jockeying between the BJP, which remains the largest party with 240 out of 543 seats, and politicians from the NDA, including two main kingmaking groups, the Telugu Desam and Janata Dal (United). Indian television stations reported that 11 of 72 ministerial positions would go to the BJP’s allies.

Analysts say that the domineering Modi, who centralised control in his office and rammed through legislation with strong parliamentary support, will have to learn new diplomatic skills, slow politically contentious reform plans and tame the BJP’s Hindu nationalist goals.

“Modi does not have much experience ruling by consensus,” said Chietigj Bajpaee, senior research fellow at Chatham House in London. “This raises latent risks, particularly if the BJP alienates coalition partners by trying to encourage defections or splits within parties as has been the case in the past.”

He added that kingmaker leaders, N Chandrababu Naidu of the Telugu Desam and Nitish Kumar of the Janata Dal, are also “prone to coalition flip-flopping”.

Modi’s cabinet was also sworn in on Sunday, with many from his last government returning to posts. Those include his right-hand man, Amit Shah, a powerful and feared operator who controlled many of India’s security agencies as home minister.

Also in the line-up are Piyush Goyal, India’s main negotiator in trade talks with countries including the UK, Nirmala Sitharaman, finance minister in the last government, and Subrahmanyam Jaishankar, who imposed a form of strident Indian realpolitik as foreign minister. It was not immediately clear if the ministers would remain with the same portfolios.

India’s return to multi-party haggling, not seen since Modi first stormed to national power in 2014, has fuelled concerns among economists over fiscal slippage and the likely pressures on the government to dole out financial support for political interests.

Rating agency Moody’s has warned that coalition politics could “impede progress on fiscal consolidation” and slow down economic reforms as India looks to build out a globally competitive manufacturing industry.

A survey published in The Hindu national newspaper on Thursday showed that it was concern over inflation and a lack of decent jobs to employ India’s vast working-age population that cost Modi at the ballot box.

Modi’s often-repeated Viksit Bharat (or Developed India) pledge — his promise to turn India into a developed country by 2047 — would remain a key component of his third term, “particularly as economic grievances were one of the factors that contributed to the election outcome”, said Bajpaee.

“However, there will be course corrections, which are likely to be reflected in the July budget,” he added. “Fiscal consolidation efforts may slow amid a renewed push on populist spending, such as an increased allocation to welfare schemes.”