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India's ruling BJP seen losing ground in key state polls before national vote

FILE PHOTO: Indian Prime Minister Narendra Modi greets attendees at the end of a sideline event ahead of the Group 20 summit called "Yoga por la paz" (Peace through Yoga) in Buenos Aires, Argentina, November 29, 2018. REUTERS/Andres Martinez Casares/File Photo

(reuters_tickers)

By Sanjeev Miglani and Alasdair Pal

NEW DELHI (Reuters) - Indian Prime Minister Narendra Modi's ruling party is likely to lose two heartland states while a third is too close to call, exit polls showed on Friday in the final test of popularity before a national election due by May next year.

Surveys broadcast at the end of voting for five state assemblies showed the ruling Hindu nationalist Bharatiya Janata Party (BJP) trailing behind the rival Congress party in some areas.

The actual votes will be counted on Tuesday, and exit polls have been wrong in the past, partly because of the sheer scale of Indian elections involving millions of votes.

Still, nearly all the polls showed that the Congress - led by Rahul Gandhi, the scion of the Nehru-Gandhi family - will win a clear majority in western Rajasthan state and scrape through in eastern Chhattisgarh, according a survey of surveys pulled together by NDTV.

In Madhya Pradesh, the same polls suggested the BJP and the Congress were locked in a fight down to the wire.

The combined surveys showed the BJP winning 110 seats, the Congress 108, and smaller groups 12 in the 230-member house. To rule, a party requires 116 seats.

The three states are part of the northern Hindi belt, a bastion of the ruling Hindu nationalists.

CLUES

"The BJP is struggling everywhere, for all its bravado," said Juhi Singh, a spokesman of the regional Samajwadi Party.

Modi, who came to power with a sweeping majority in 2014, has been praised for improving governance and cutting some red tape, but has been criticised for failing to create enough jobs for the thousands of young people entering the jobs market every month.

He has also faced criticism for allowing hardliners in his party to undermine India's secular foundations.

Foreign investors who largely remain bullish on India's long-term prospects, are watching the state polls closely for clues to the national vote.

"The result would be consistent with what most polls are showing: that we are heading for hung parliament," said Jan Dehn, head of research at emerging markets fund manager Ashmore.

"The market may discount the results a little bit given these are state elections and there are often protest votes."

But a divided parliament would make it difficult for the incoming government to carry out reforms in the banking sector and other areas, he said.

(Reporting by Sanjeev Miglani and Alasdair Pal; Editing by Andrew Heavens)

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