INDIA: Modi congratulated party's victory in Bihar

India's governing Bharatiya Janata Party has conceded defeat in the key state election in Bihar, in what is being seen as a major blow for the prime minister, Narendra Modi.

Nitish Kumar, the incoming chief minister, said on Twitter on Sunday that Modi had called him and congratulated him on his party's victory in Bihar, one of India's largest and poorest states.

"Had a telephone conversation with Shri @NitishKumar & congratulated him on the victory," Modi said on Twitter of Kumar. 

Election Commission results showed Modi's BJP leading in only 52 seats in the 243-seat state assembly compared to 158 for Kumar's coalition of regional parties, as vote counting continues.

Modi had mounted a no-holds barred campaign in Bihar, addressing about 30 rallies and promising voters billions of dollars for development in a state with some of India's highest malnutrition and illiteracy levels.

The election for the state assembly was seen as a critical test of Modi's popularity after he swept to power at national polls in May 2014 promising ambitious reforms to revive the faltering economy.

As the contest tightened in recent weeks, the campaign shifted to bitter issues along religious and caste lines which have traditionally dominated the state of 100 million people.

The BJP needed a win after suffering a defeat in February elections for the New Delhi state assembly to a fledgling anti-corruption party.

Assembly elections are important not only because state leaders wield significant power, but because parties gain seats in India's upper house of parliament, where the BJP lacks a majority.

The campaign has been dogged by religious tensions after several Muslims were killed in separate incidents by Hindu mobs who suspected them of stealing or eating cows.