Prime Minister Narendra Modi’s party is ahead of its rivals in Indian capital Delhi, where votes are being counted after a tightly-fought election.

The Bharatiya Janata Party (BJP) is leading in 41 seats in the 70-member legislative assembly, while the incumbent Aam Aadmi Party (AAP) is ahead in 28 seats, according to data released so far by the Election Commission of India (EC).

These are, however, early leads and the tally can change as more votes are counted through the day.

A party that wins more than the halfway mark of 35 seats can form the government.

Most exit polls, following the vote on Wednesday, had predicted an absolute majority for the BJP, giving them more than 35 seats.

However, analysts warn that the exit polls, released by various news agencies, have often been wrong in the past and are not impartial.

Winning Delhi is a prestige battle for both frontrunners, given its symbolic importance as the capital.

The city, a federally-administered territory, has been governed by the AAP since 2013, with voters backing its strong record of welfarism. But the party and its leaders have recently been embroiled in corruption allegations – which they have denied.

For the BJP, securing Delhi represents more than just electoral success – it would mark a crucial foothold in the nation’s capital after being out of power since 1998.

The party, which has had recent election successes in other states, such as Maharashtra and Chhattisgarh, has thrown resources at the Delhi campaign, with Modi as well as Home Minister Amit Shah attending events.

Congress, the main opposition party at the national level, is also in the race, but polls indicate a bleak outlook for it.

The party governed Delhi from 1998 to 2013, but was ousted over allegations of corruption that saw voters turn to AAP instead. It has failed to make a mark since.

More than 60% of eligible voters cast their ballot in the poll this time.

Delhi has a unique governance structure.

Key decisions related to public order, police and land are taken by the lieutenant governor (LG) who is appointed by the federal government. The state legislature handles matters including education, health and public services.

This division has often caused friction between the federal government and state legislature when they are run by rival parties.

The power structure is also a reason why the election campaigning in Delhi is more focused on welfare than on political or identity issues, which play a larger role in elections elsewhere in the country.

The AAP and BJP campaigns both promised improvements to public schools and free healthcare services as well as cash handouts to women.

Meanwhile, the BJP also hoped for a boost from last week’s federal budget, which slashed income tax for the salaried middle class, a key voting bloc in the capital.

Experts say that a BJP win in politically crucial Delhi will reinforce Modi’s popularity among Indian voters after his party lost its outright majority in last year’s general election.

It would also be a big blow to the AAP, a much smaller party which was praised in its early years in power for focusing on improving education and health facilities in the city.

Much of the BJP campaign targeted the AAP’s chief Arvind Kejriwal, an anti-graft activist, who was jailed in a corruption case relating to a now-scrapped alcohol sales policy last year.

Kejriwal, who denies all allegations and was released on bail in September, has accused Modi’s party of carrying out a “political vendetta” against him and the AAP, charges that the BJP denies.

The Supreme Court’s bail conditions ban him from entering the chief minister’s office or signing files. Kejriwal resigned from the role days after his release from prison.

The bitter, weeks-long campaign to win the capital focused strongly on welfare facilities for its residents. One topic, however, remained off the agenda – Delhi’s perennial air pollution crisis that affects the city of more than 30 million for much of the year.

The BJP has promised to reduce the city’s Air Quality Index (AQI) by half by 2030 if it wins. But the issue didn’t dominate discussions or become a talking point in the election campaign.

Follow BBC News India on Instagram, YouTube, Twitter and Facebook.