Mr Modi's landslide, the most resounding election victory India has seen in 30 years, was welcomed with a blistering rally on India's stock markets and raucous celebrations in offices of his Bharatiya Janata Party (BJP), where supporters danced, exploded fireworks and gave out sweets.
The BJP looked certain of a majority, giving the 63-year-old former tea-seller ample room to advance economic reforms started 23 years ago by current prime minister Manmohan Singh but which had stalled in recent years.
Singh's Congress party suffered its worst ever wipeout, a big boost to Mr Modi's goal of ending the dominance of the Nehru-Gandhi family that has governed for most of the 67 years of independent India.
Mr Singh, whose party looked set to win less than 50 of the 543 parliamentary seats at stake, congratulated Modi by phone.
Crowds surged around Mr Modi's car after he visited his mother's home in the western state of Gujarat, where he has been chief minister since 2001.
He sent a message saying "India has won" that instantly set a record as the country's most retweeted Twitter post.
The desire for change has been so strong that voters put aside concerns about Mr Modi's Hindu-centric politics.
"I'm so happy because all of India wanted a strong government," shouted software engineer Vinod Rai at the BJP's Delhi headquarters.
Mr Rai echoed the sentiments of millions of Indians who bought into Mr Modi's promises of job creation and economic growth to satisfy a bulging youth population.
With more than six times the seats of its closest rival, mr Modi's is the most decisive mandate for a leader since the 1984 assassination of prime minister Indira Gandhi propelled her son to office.
Since 1989, India has been governed by coalitions.
Counting trends showed that the BJP had already won or was winning in 283 seats in parliament, comfortably across the halfway mark of 272 required to rule.
An alliance led by the party was ahead in 338 seats.
Responding to the news, Indian markets got off to a roaring start, with the rupee breaking below 59 to the US dollar, an 11-month high, and the benchmark stock index jumping 6% to a record high before paring its gains.
Betting on a Modi win, foreign investors have poured in more than £9 billion into Indian stocks and bonds in the past six months and now hold more than 22% of Mumbai-listed equities - a stake estimated by Morgan Stanley at almost £166 billion.
Unlike his predecessors, Mr Modi will not have to deal with unruly partners as he implements reform, which could usher in profound changes, and he will try to replicate his success in attracting investment in Gujarat, where he has governed for more than 12 years.
"He can afford to have a smaller but stronger cabinet, that means a far more decisive government," said Navneet Munot, Chief Investment Officer at SBI Funds Management.
With India's economy suffering its worst slowdown since the 1980s and battling high inflation, it will not be an easy task to meet the hopes of millions of Indians who have pinned their hopes on Mr Modi quickly taking the country to the top table of the world's economic powers.
His party also lacks strength in the upper house of parliament, where backing is needed for legislation to pass.