Patna, India (AFP/REUTERS) - Indian Prime Minister Narendra Modi has conceded defeat on Sunday (Nov 8) in a key election in Bihar, one of India's biggest and poorest states, in a major blow for the Prime Minister.
"Had a telephone conversation with Shri @NitishKumar & congratulated him on the victory," Mr Modi said on Twitter of his opponent, Bihar Chief Minister Nitish Kumar.
Election Commission results showed Mr Modi's Hindu nationalist Bharatiya Janata Party (BJP) leading in only 58 seats in the 243-seat state assembly compared with 160 for Mr Kumar's coalition of regional parties, as vote counting continues.
Mr Modi's defeat signals the waning power of a leader who until recently had an unrivalled reputation as a vote winner.
The defeat is a setback for Mr Modi's push to pass economic reforms because he needs to win most of the state elections in the next three years to gain full control of Parliament.
"The writing is on the wall. Modi's magic has failed and we have clearly won the battle," said Mr Sanjay Singh, a spokesman for the regional parties led by Bihar Chief Minister Nitish Kumar.
BJP spokesman GVL Narsimha Rao denied the loss was a personal blow for Mr Modi, saying the odds were stacked against their party after regional rivals joined forces.
"This election was loaded against us. It is a defeat of the arithmetic," Mr Rao told India Today TV. "Our PM has delivered even in this election. It is because of his appeal that we managed a creditable performance."
Mr Modi has mounted a no-holds barred campaign in Bihar, addressing some 30 rallies and promising voters billions of dollars for development in a state with some of India's highest malnutrition and illiteracy levels.
The election for the state assembly is seen as a critical test of Mr Modi's popularity after he stormed to power at national polls in May 2014 promising sweeping reforms to revive the faltering economy.
Mr Modi was up against an unlikely alliance of two powerful local leaders, Chief Minister Nitish Kumar and his predecessor Lalu Prasad Yadav, who has served time in prison for corruption.
As the contest tightened in recent weeks, the campaign shifted to bitter issues along religious and caste lines which have traditionally dominated the state of 100 million people, more than the population of Germany.
Coalition party workers danced in the street and set off fire crackers in celebration in the state capital Patna.
The BJP needs a win after suffering a humiliating defeat in February elections for the New Delhi state assembly to a fledgling anti-corruption party.
Assembly elections are important not only because state leaders wield significant power, but because parties gain seats in India's upper house of parliament, where the BJP lacks a majority.
The campaign has been dogged by religious tensions after several Muslims were killed in separate incidents by Hindu mobs who suspected them of stealing or eating cows which Hindus consider sacred.