This article examines the effects of the unexpected defeat of India’s Bharatiya Janata Party-National Democratic Alliance in the May 2004 general elections. The Congress-United Progressive Alliance (UPA) won, not because of opposition to economic liberalization or its Hindu nationalist agenda, but because the Congress made much better alliances with regional parties. The new coalition government’s ability to enact significant economic reforms or make real progress on the Kashmir issue or in peace talks with Pakistan will be limited however, though we can expect to see a reduction in Hindu-Muslim violence over the next five years.