NEW DELHI - India's coalition government was set to collapse after last-ditch peace talks with an estranged ally failed yesterday, pointing the way towards fresh elections.
The United Front coalition, facing a crucial vote of confidence today, failed to persuade the Congress (I) party to back down after it had insisted on the resignation of the Prime Minister, Mr H. D. Deve Gowda, as the price for its renewed support.
The Congress then underlined the failure by ordering its members to vote against the government in today's vote, making fresh elections a near-certainty.
Yesterday's developments caused Indian shares prices to tumble by almost three per cent in Bombay.