By Tommy Wilkes
NEW DELHI (Reuters) - Indian Prime Minister Narendra Modi's ruling party on Thursday won power for the first time in the northeastern state of Assam, a victory that will help his right-wing nationalist government recover some reform momentum after poll losses last year.
Grabbing power in Assam, one of five states electing new legislatures, is a sign that Modi's Bharatiya Janata Party (BJP) is expanding its political influence beyond its traditional heartland.
It also meant a bruising day for the main opposition Congress party, which has blocked economic reforms in parliament but now looks an increasingly marginalized force after defeats in Assam and the southern state of Kerala.
"Heartiest congratulations to Assam BJP ... and leaders for the exceptional win. This win is historic," Modi said on Twitter, after a polarizing campaign in an underdeveloped state rife with ethnic and religious tension.
The BJP and its allies won in at least 80 of the 126 seats in Assam while regional parties triumphed elsewhere. The election commission is expected to announce final seat tallies later on Thursday.
State elections are especially important for Modi's party because state legislators elect members of the upper house of parliament where reforms including a landmark tax bill are stuck because it does not have a majority.
Congress said it would continue to block the goods and services tax legislation in parliament unless Modi agreed to its conditions.
Modi's party will hope a weakened Congress will make it easier to persuade regional parties to back his reforms.
FOCUS ON REGIONAL PARTIES
Regional parties were re-elected in the southern state of Tamil Nadu and the eastern state of West Bengal, where the BJP has a small presence and was not expected to win.
"That will help the BJP pass these bills, provided it can develop a coalitional style of politics and reach out to these parties," said Rajiv Kumar, an analyst at the Centre for Policy Research in New Delhi.
Capital Economics said that while Modi still faced an uphill battle getting his legislation through parliament, the results had improved the prospects slightly.
"The upshot is that the outlook for economic reforms has brightened a touch," said Singapore-based Shilan Shah.
The results will also boost the BJP's confidence ahead of an election next year in Uttar Pradesh, India's most populous state, that is a must-win if Modi is ever to realize his hope of controlling both houses of parliament.
Modi, 65, stormed to power in 2014 with a promise of jobs and growth for India's 1.3 billion people. But the failure to pass reforms including the biggest revenue shake-up since independence has dented his party's reputation.
The prime minister took a less prominent role in this year's elections after a bad loss in a November poll in the eastern state of Bihar. His party also lost in the capital New Delhi last year.
Modi's party has invested significant political capital to make inroads into opposition strongholds, and increased its tiny seat share in West Bengal.
(Additional reporting by Douglas Busvine and Mohi Narayan in NEW DELHI, Biswajyoti Das in GUWAHATI and Sujoy Dhar in KOLKATA; Editing by Sanjeev Miglani and Robert Birsel)