India's main opposition Congress party and its allies are set to win Jharkhand state elections in a setback for the ruling Bharatiya Janata Party (BJP).
The Congress and its allies have won, or are leading, in 46 of the 81 seats, while the BJP is on course to take 25.
This is the second key state the BJP has lost since sweeping parliamentary elections in May.
The result will embolden its opponents amid nationwide protests against a new citizenship law seen as anti-Muslim.
With votes still being counted in Jharkhand in the north-east, the regional Jharkhand Mukti Morcha (JMM) has emerged as the single largest party. Together with the Congress it is set to form the new government, results showed.
Senior BJP leaders said they would "accept the people's mandate". The party failed to form the government in Maharashtra state last month after falling out with its regional ally, Shiv Sena.
Why the result is crucial
Although the election in Jharkhand was fought largely on local issues, the BJP's defeat is being seen as a setback for its policies.
Three of the five phases of the election were held as protests took place against the Citizenship Amendment Act (CAA) across the country. More than 20 people have died during the protests, with many of them shot, according to local media.
The law provides citizenship to non-Muslim illegal immigrants from Pakistan, Bangladesh and Afghanistan.
Prime Minister Narendra Modi said the law would "help the persecuted" - but critics say it discriminates against Muslims.
Others - particularly in border states - fear being "overrun" by new citizens.
Speaking at a rally on Sunday, Mr Modi said Muslims - one in seven of India's 1.35bn population - did not "need to worry at all" about the new citizenship law.
"I must assure Muslim citizens of India that this law will not change anything for them," he said. "Muslims who are sons of the soil and whose ancestors are the children of mother India need not worry."
In a speech which lasted nearly 100 minutes, he also denied the law was divisive.
"People who are trying to spread lies and fear, look at my work. If you see any trace of divisiveness... show it to the world," he said.
What is the controversial law?
The CAA allows Hindus, Christians and other religious minorities to become citizens - if they were persecuted because of their religion in the three countries.
But critics say this is part of a "Hindu nationalist" agenda to marginalise India's Muslims.
The act follows a government plan to publish a nationwide register that it says will identify illegal immigrants.
A National Register of Citizens (NRC) published in the north-eastern state of Assam saw 1.9 million people effectively made stateless.
The NRC and the Citizenship Amendment Act are closely linked as the act will protect non-Muslims - but not Muslims - who are excluded from the register.
Thousands across India have continued protesting despite police bans, marking the biggest challenge to Mr Modi's leadership since he won power in 2014.
Authorities have been battling to restore order - internet services in several states were shut down and thousands have been detained.