Indian Prime Minister Narendra Modi's party was forced out of power Tuesday in Maharashtra state, home to the country's financial capital Mumbai, following the collapse of its short-lived coalition.
Hard-fought state elections last month saw Modi's Hindu nationalist Bharatiya Janata Party (BJP) win the largest share of seats but not enough to form a government on its own, prompting weeks of haggling that culminated in the imposition of presidential rule on Maharashtra two weeks ago.
The BJP managed to eke out a surprise agreement with a top leader from the Nationalist Congress Party (NCP) on Saturday, but victory was fleeting, after other NCP leaders denounced the deal, leading to its dissolution.
BJP lawmaker Devendra Fadnavis resigned as chief minister Tuesday, telling reporters that the party could not form a government.
Although the BJP had previously governed the country's richest state in a coalition with its right-wing regional ally Shiv Sena, the alliance broke up after the October election due to a power-sharing dispute.
Shiv Sena and its ideological rivals, the centre-left Indian National Congress, and the NCP are expected to stake a joint claim to form a government instead.
"The fact that these parties, which have so little in common, are coming together just to keep the BJP out -- this has very dangerous implications for Modi and his party," said Dhaval Kulkarni, author of a book on Shiv Sena.
"After all the horse-trading last week, the BJP has basically ended up with egg on its face," he told AFP.
India has been battling an economic slowdown, and the loss of power in Maharashtra, whose capital Mumbai is home to business tycoons, the stockmarket and the glitzy Bollywood film industry, is a big blow to Modi.