Congress party was trailing in fourth place as counting of votes got underway in Uttar Pradesh on Tuesday, a stunning blow to Rahul Gandhi who had staked his political future on reviving his party's fortunes in the state.
"It's baffling if this is true," Congress spokesman Abhishek Manu Singhvi said as partial results showed his party was likely to fall far short of the 120 seats it predicted it would win in the state's 403-seat legislative assembly.
"I still don't believe the trends."
With results in for 321 seats, Congress and a regional ally had won just 40.
Congress also looked set to lose in Punjab and Uttarakhand, but were leading the seat tally in Manipur and Goa.
The Samajwadi Party (SP) looked set to win by far the largest number of seats in Uttar Pradesh, a state that with 200 million people has a larger population than Brazil. This could mean a return to power for Mulayam Singh Yadav and the ouster of flamboyant low-caste leader Mayawati as chief minister of the state.
Gandhi, scion of the Nehru-Gandhi dynasty that has ruled India for most of its 65 years of independence, campaigned tirelessly to revive his centre-left party in a politically crucial state where it has not held power for 22 years.
Congress, which heads the central coalition government, won only 22 of Uttar Pradesh's assembly seat in the last poll.
The party's setbacks in Uttar Pradesh and the other states could make it harder for Prime Minister Manmohan Singh's already weakened coalition government to pursue reforms that could shore up economic growth, which has slipped below 7%.
Congress spokesman Singhvi strenuously defended Gandhi's electioneering despite the disappointing results.
"Not even Rahul Gandhi's worst enemies, political or otherwise, suggest that his leadership was lacking. He was outstanding," he said. "He's gone to every nook and cranny, he's provided the spirit, the euphoria, the leadership - if it doesn't translate, then it doesn't translate."