Reuters International

Election officials count votes in the West Bengal Assembly elections, at a counting centre in Kolkata, India May 19, 2016. REUTERS/Rupak De Chowdhuri

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By Tommy Wilkes

NEW DELHI (Reuters) - Indian Prime Minister Narendra Modi's ruling party declared victory on Thursday in an election in the northeastern state of Assam, which will help his right-wing nationalist government rebuild some momentum after poll losses last year.

Grabbing power in Assam, one of five states electing new legislatures, is a first for Modi's Bharatiya Janata Party in India's volatile northeast, expanding its political influence beyond its traditional heartland.

The BJP led in the races for more than 80 of the 126 seats in Assam where clear trends had been established, unofficial tallies compiled by television broadcasters showed, beating the main opposition Congress party into second place.

"Heartiest congratulations to Assam BJP ... and leaders for the exceptional win. This win is historic," Modi said on Twitter, after a polarising campaign in an underdeveloped state rife with ethnic and religious tension.

State elections are especially important for Modi's party because state legislators elect members of the upper house of parliament where Modi's landmark goods and services tax bill is stuck because it does not have a majority.

Congress, which was the big loser in the elections, said it would continue to block the tax reform in parliament unless Modi agreed to its conditions.

Elsewhere, tallies showed regional parties heading for victory in the southern states of Kerala and Tamil Nadu and the eastern state of West Bengal, where the BJP has a small presence and was not expected to win.

The Congress party, which has ruled India for most of its 68 years of independence, lost power in Kerala as well as Assam.

FOCUS ON REGIONAL PARTIES

Modi, 65, stormed to power in 2014 with a promise of jobs and growth for India's 1.3 billion people. But the failure to pass reforms including the biggest revenue shake-up since independence has dented his party's reputation.

The focus will now turn to the regional parties that have won decisively in Tamil Nadu and West Bengal, and could tip the balance in the upper house of parliament.

Modi's party will hope a weakened Congress will make it easier to convince regional parties to back his reforms in the upper house.

"That will help the BJP pass these bills, provided it can develop a coalitional style of politics and reach out to these parties," said Rajiv Kumar, an analyst at the Centre for Policy Research in New Delhi.

Modi took a less prominent role in this year's elections after a bad loss in a November poll in the eastern state of Bihar. His party also lost in the capital New Delhi last year.

Modi's party has invested significant political capital to make inroads into opposition strongholds, and increased its tiny seat share in West Bengal.

(Additional reporting by Douglas Busvine in NEW DELHI, Biswajyoti Das in GUWAHATI and Sujoy Dhar in KOLKATA; Editing by Sanjeev Miglani and Clarence Fernandez)

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