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Earlier this year, BJP’s efforts to return to power looked to be on shaky grounds, especially after the party lost three key state elections in December. People across India have had mixed reactions to some of Modi’s landmark economic reforms and policies. They include the introduction of the Goods and Services Tax and demonetization — where the government unexpectedly withdrew all its 500 and 1,000-rupee notes, and replaced them with 500 and 2,000-rupee denomination currencies.

Then, a terrorist attack in Kashmir, and India’s subsequent response to it, shifted the momentum in Modi’s favor.

“That reinvigorated the campaign and took the attention away from, quite frankly, the not-so-great economic record,” Bery told CNBC’s “Squawk Box ” on Thursday.

“You had a slowing economy and also the leaked jobs report, which showed that India’s unemployment rate was at a 45-year high. By shifting to national security, Prime Minister Modi was able to take attention away from those negative stories, ” he added.

Still, Modi’s government will likely have its work cut out: India’s economy is slowing down, its shadow banking sector is in crisis, credit lending from banks is still relatively weak. More needs to be done to spur private investments so that the country doesn’t only rely on consumption to grow, according to analysts.

“Modi 2.0 will inhabit the roles of both economic moderniser and economic populist, contrary to his supporters and critics who have often sought to characterise him as either one or the other,” Control Risks’ Rao wrote.

He added that Modi will likely continue with his efforts to streamline the GST while continuing to empower India’s insolvency and bankruptcy code to tame the massive amounts of debts sitting in the banking sector — but he would not carry out a wholesale privatization of state-owned banks or loosen political control over lending decisions.

“At the same time, increased pressure over rural distress and unemployment will stoke Modi’s economic populist instincts, which will likely see an increased focus on rural spending and handouts aimed at supporting small and medium-sized enterprises,” Rao said.

This is a developing story. Please check back for updates.