India's main opposition party, the Indian National Congress, has won a key state election in Karnataka, defeating the Bharatiya Janata Party (BJP) on Saturday.

The Congress party has won 126 seats of the state assembly's 224 seats so far, according to the Election Commission website.

The party is slated to win 10 more seats, putting it on track to form a government in India's eighth most populous state. A party needs at least 113 seats to form the government in the state.

The Congress party's victory deals a heavy blow to Indian Prime Minister Narendra Modi, who campaigned aggressively in the state in the build-up to the Wednesday vote.

The BJP has now lost power in the only southern state it governed.

Why does the state poll matter?

Karnataka, with a population of some 64 million people, is an economic powerhouse. It is home to the country's tech hub and contributes significantly to India's GDP.

The election is the first of five crucial state polls this year that are seen as setting the tone for parliamentary elections due in 2024.

Before Saturday, Congress had won only one of 24 state or federal territory elections since 2019, when Modi swept the general elections for a second term.

In contrast, the BJP won 15 states or federal territories either on its own or in alliance with regional parties.

By Saturday evening local time, the BJP's outgoing chief minister of Karnataka Basavaraj Bommai appeared to concede defeat.

"We accept the verdict of the people of Karnataka with due respect, we will take this verdict in our stride," he wrote on Twitter.

Modi's brand of divisive politics backfires?

Modi's BJP has been accused of sowing division across India between the Hindu majority population and the country's Muslim and Christian communities.

Compared with other parts of the country, those populist tactics haven't taken hold in Karnataka — one of the wealthiest states whose capital Bengaluru is considered to be India's tech hub.

However, some friction has been reported between majority Hindus and minority Muslims after BJP leaders and supporters banned girls from wearing the headscarf as part of their school uniform.

Around 84% of Karnataka's population are Hindu, almost 13% Muslim and less than 2% are Christian, according to the most recent census in 2011.

"The shop of hatred has been shut down," Congress party leader Rahul Gandhi told reporters in New Delhi, referring to the BJP.

Congress spokesperson, Radhika Khera, said the party's expected win is a "resounding reply to Modi's divisive politics."

Congress campaigned over rising prices and graft

The opposition camp built its campaign by targeting Modi's party over rising inflation, corruption allegations and poor infrastructure.

The Congress party also promised electricity subsidies, rations to poor families, and financial assistance to unemployed graduates.

The campaign resonated with voters despite a defamation scandal over Modi's family name that forced Congress leader Rahul Gandhi to quit in March, and deprived him of his seat in parliament.

Gandhi is counting on a court overturning his conviction and restoring his right to run for office.

Setting the tone for general elections

With the general elections coming up next year, opposition parties are planning to form a united front to challenge Modi next year.

Congress was routed by the BJP in the last two national polls and is striving to regain its political prominence nationwide.

Karnataka became the second state Modi's party has lost to the Congress in the last six months.

In December, the Congress unseated BJP in northern Himachal Pradesh, a small state tucked in the Himalayas.

rm, mm/dj (AP, Reuters)