Indian financial markets took fright yesterday at the humiliating defeat suffered in the pivotal Bihar election by Prime Minister Narendra Modi and his party, whose leaders have begun meeting amid calls for a rethink of policies and priorities.

The PM will meet nearly a dozen senior colleagues of the BJP, including its president Amit Shah, Finance Minister Arun Jaitley and Home Minister Rajnath Singh.

"We have to identify what went wrong," said Ram Madhav, a Bharatiya Janata Party (BJP) general secretary.

Some BJP lawmakers have called now for the party to refocus on a more unifying agenda focusing on economic development after a campaign that used rhetoric in Bihar and was accused of attempting to polarise voters along caste and religious lines. "We have to be single mindedly focused on development, development, development," said Chandan Mitra, a BJP member of parliament. "We can't afford to be distracted by anything else."