When polling did not mirror the results in 2004, the NSE index fell 12.2% in one day and 19.0% over two days. Analysts predict India’s markets could plunge 8% to 10% in one day and up to 20% when all is said and done. Consequently, at least four brokerages have raised margin requirements to cushion the potential volatility.

The recent rally in Indian shares “has been largely in anticipation of NDA coming to power with a majority or near to majority,” Ritu Jain, managing director of investment bank Eos Capital Advisors, said in the Reuters article. “In the event of NDA not coming to power, markets can correct by about 15 per cent or a little more.”

India country-specific ETFs have produced strong returns this year on the optimistic turnout in the election season. Year-to-date, EPI is up 9.8%, the iShares MSCI India ETF (NYSEArca: INDA) rose 6.6% and PowerShares India Portfolio (NYSEArca: PIN) gained 5.4%.

WisdomTree India Earnings Fund

For more information on India, visit our India category.

Max Chen contributed to this article.