India's ruling Bharatiya Janata Party (BJP) conceded defeat on Tuesday in a constituency where the inauguration of a grand Hindu temple just months ago by Prime Minister Narendra Modi was seen as an event that would cement his legacy and the party's poll victory.

The BJP looks set for heavy losses in the bellwether northern state of Uttar Pradesh, as the opposition Samajwadi Party and Congress race ahead in more than half of its 80 seats, including in Ayodhya city in the Faizabad constituency where Modi inaugurated the temple in January.

The opening of the temple dedicated to god-king Lord Ram, on a site previously contested by India's minority Muslims, fulfilled a three-decades old BJP promise which it mentioned in almost every campaign rally during the massive two-months long vote in the Hindu-majority country.

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"I could not protect your and Ayodhya's dignity, there must have been some shortcoming in me," Lallu Singh, the BJP's incumbent lawmaker from Faizabad, told party workers, according to footage shared by the Indian Express daily.

"There must have been some reason that we couldn't win in the Ayodhya parliamentary region."

Faizabad constituency elected Singh twice to the parliament, in 2014 and 2019, when Modi's party swept 71 and 62 seats in Uttar Pradesh, India's most populous state.

Latest trends from the Election Commission showed the BJP's tally trimmed to 33 seats in the state, which has drawn focus of analysts to the issues of unemployment and high inflation - two key concerns of voters that surveys showed trumped religion.

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"We are very happy with the temple but people were fed up with the BJP," said Rakesh Yadav, the chairperson of the Ayodhya Vyapar Mandal, a traders body.

He said there was anger among small business owners for getting lower than expected compensation when their shops were demolished during Ayodhya's redevelopment ahead of the temple inauguration.

"People will not always fall for the caste or temple-mosque politics. They also want to see development, which is why the results may surprise us all," he added.

The Ram temple was constructed on orders of the Supreme Court after a bloody, decades-long dispute that in 1992 saw a Hindu crowd demolish a 16th century mosque that existed on the site, claiming it was built on the birthplace of the god-king.