BJP's failure to win the election in Bihar is seen as indication that Modi's appeal to voters has begun to wane, the Guardian said in its report.
"India's ruling party has conceded defeat in a provincial election seen as a test of the vote-winning abilities and political strategy of the prime minister, Narendra Modi," it said as Modi prepared to make a high-profile maiden visit to the UK this week.
BJP's loss in Bihar "is the most significant domestic setback for Modi since he won a crushing victory in a general election in the emerging economic power last year, after a campaign promising rapid development, modernisation and opportunity combined with a defence of conservative cultural and social values," the paper said.
The failure to win Bihar for his party will hinder Modi's push to pass crucial economic reforms because he needs to win such elections to gain full control of parliament, it said.
"So far, the economic takeoff Modi promised during last year's election has proved elusive," the paper said.
"More broadly, Sunday's defeat in Bihar, which has a population of 105 million, might indicate that though Modi, a Hindu nationalist who started his career with a right-wing religious and cultural revivalist organisation, still retains significant national popularity and momentum, his appeal to voters has begun to wane," it said.
"Mr Modi won a convincing victory in last year's national elections, but this poll was seen as a referendum on his economic programme," the BBC said.
"Defeat is a major setback, it said.
In Pakistan, leading newspaper Dawn said, a resounding verdict in Bihar against Prime Minister Modi's "cow politics at the expense of India's traditional tolerance of food habits, put his BJP out to pasture on Sunday while setting the agenda for an opposition regrouping against his narrow nationalism."
The News, in its report said that the defeat of the BJP in Bihar was a major blow for the Prime Minister who fronted a no-holds barred campaign.
"It seems India has given its first verdict against Modi's fundamentalist policies in the Bihar elections where Modi's Hindu nationalist party unable to take even 80 out of the 243-seat state assembly compared to 160 for a coalition of rival regional parties," it said.
The New York Times said Prime Minister Modi suffered a severe political setback when the voters of Bihar, the country's third most populous state, overwhelmingly rejected his party in state assembly elections.
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