(Web Desk) — Indian Prime Minister Narendra Modi is set to be sworn in for a record-equalling third term on June 8, following key allies’ pledges of continued support after an election verdict that saw his party lose its parliamentary majority.

According to the Indian media, Modi, a populist leader who has dominated Indian politics since 2014, will for the first time require the support of regional allies, whose loyalties have been inconsistent over the years. This could complicate the government’s reform agenda.

On Wednesday, two allies in his National Democratic Alliance (NDA) coalition—the Telugu Desam Party (TDP), a significant regional player in Andhra Pradesh, and the Janata Dal (United), which governs Bihar—pledged their support.

“We are with the NDA. I will be attending the meeting in Delhi today,” TDP leader Chandrababu Naidu told reporters, referring to a scheduled BJP-led alliance meeting later in the day.

The federal cabinet met on Wednesday morning and recommended the dissolution of parliament, a constitutional formality before Modi can form a new government.

Local media reported that Modi and his new cabinet would be sworn in on Saturday.

The NDA secured 293 seats in the 543-member lower house of parliament, more than the 272 needed to form a government. Modi’s BJP won 240 seats on its own, a weakened verdict that could slow India’s fiscal tightening, according to ratings agency Moody’s.

The reduced majority for Modi’s alliance may challenge the government’s more ambitious reform agenda, said ratings agency Fitch. However, it added, “Despite the slimmer majority, we expect broad policy continuity to persist, with the government retaining its focus on its capex push, ease of doing business measures, and gradual fiscal consolidation.”

Rural Setbacks The BJP lost significant ground in rural areas, leading investors to believe that expected land and labor reforms might not materialize.

Newspapers reflected on Modi’s diminished aura, with the Indian Express’s headline reading: “India gives NDA a third term, Modi a message.”

Modi’s victory in his Varanasi seat, one of the holiest cities for Hindus, was subdued, with his margin of victory decreasing from nearly 500,000 votes in 2019 to just over 150,000.

Despite this reduced victory, reform paralysis is not inevitable, argued Arvind Panagariya, chairman of a government finance panel, in an Economic Times editorial. “Despite the reduced majority in parliament, the necessary reforms are entirely feasible. Delivering sustained growth at an accelerated pace can only strengthen the government’s hand in the coming years,” he said.

The opposition INDIA alliance, led by Rahul Gandhi’s centrist Congress party, won 230 seats, more than forecast. Congress alone secured 99 seats, almost double the 52 it won in 2019—a surprise increase expected to boost Gandhi’s standing.

The INDIA alliance was also set to meet on Wednesday in New Delhi to discuss its future course of action.