An Aam Aadmi Party supporter wears a mask of party chief Arvind Kejriwal while celebrating with others at the party headquarters in New Delhi on Feb 11, 2020. (MONEY SHARMA / AFP)

Prime Minister Narendra Modi’s federal ruling party conceded defeat in a hard-fought state election for control of India’s capital Delhi, the most significant test of his popularity after his religion-based citizenship law led to widespread protests across the country.

The incumbent Aam Aadmi Party, led-by chief minister Arvind Kejriwal, was set to retain power as it swept ahead in 63 of the 70 seats in the state assembly, Election Commission data showed

The incumbent Aam Aadmi Party, led-by chief minister Arvind Kejriwal, was set to retain power as it swept ahead in 63 of the 70 seats in the state assembly, Election Commission data showed Tuesday afternoon, down from 67 in the 2015 poll. Modi’s Bharatiya Janata Party was ahead in seven seats, up from their previous total of three. The Congress party did not win any seats in the election, which took place Saturday. The final vote tally is expected later in the evening.

ALSO READ: New Delhi heads to vote amid protests against citizenship law

“BJP is a cadre-based party and fought the election based on issues and development, but was defeated,” party spokesman Sambit Patra, told India TV. “The party will introspect about the reason of defeat.”

The Hindu nationalist BJP unleashed an aggressive campaign to win Delhi, where it hasn’t won government for some 22 years, with Modi and his home minister Amit Shah leading the charge. The run-up to the polls was marked by divisive speeches and calls to violence by some members of his party. The city saw at least three shooting attacks near an area where thousands of people have been demonstrating against the Citizenship Amendment Act. The The push-back against the law has been Modi’s biggest since he first came to power in 2014.

The new religion-based citizenship act, which was passed by an overwhelming majority in the Parliament, fast-tracks citizenship for religious minorities from three neighboring countries, but excludes Muslims. Protesters say the law undermines India’s secular constitution while the government says its aim is to protect persecuted minorities.

The Delhi elections also came at a time when the nation is facing slowing economic growth and a surging unemployment rate.

Decisive defeat

“The decisive defeat of BJP in Delhi shows Modi magic is not working effectively and he is not invincible,” said Satish Misra, a political analyst at the Observer Research Foundation, a New Delhi-based think tank. “It’s a wake-up call to BJP and its politics. It also indicates that the opposition can challenge BJP if they stand united.”

The defeat is in keeping with a recent trend of the BJP losing states to regional parties and opposition alliances. Despite having won a landslide victory to a second term in federal elections last year, Delhi is the third straight electoral setback after losses in the richest state of Maharashtra and the mineral–rich eastern province Jharkhand.

While on paper Delhi has little say in national affairs -- accounting for about 1% of all parliamentary seats -- its position at the heart of Indian power gives it outsized importance and a failure to capture power in the capital city will likely demoralize the BJP’s ground workers.

READ MORE: India's BJP loses another state poll, adding to Modi's woes

The Aam Aadmi Party, formed in 2012 after a popular anti-corruption movement, focused its campaign on local civic issues including water supply, cheap electricity and education.

“People of Delhi have created a new kind of politics in the country -- that is politics of development,” Kejriwal said in his victory speech. “They have given a message that votes go to those who build schools, clinics, roads and provide water and electricity. This new kind of politics is a good omen for the country.”