Uttar Pradesh is home to over 200 million people -- more than the entire population of Brazil -- and polls in the battleground state are a bellwether of national politics.
This election is seen as a referendum on Modi's controversial ban on high-value banknotes, a move aimed at combating tax evasion by the rich that has hit poor rural communities hard.
The northern state voted overwhelmingly for Modi's Hindu nationalist Bharatiya Janata Party (BJP) in the 2014 general election, powering him to victory over the Congress Party that has dominated Indian politics since independence.
But now the BJP faces a major challenge from the youthful and charismatic current Chief Minister Akhilesh Yadav, who has tapped into the pain from Modi's cash ban to try and swing the state his way.
"Modi must answer the people. His credibility will come into question, and that is why he is panicking," Yadav told reporters Saturday in the state capital Lucknow.
"This result is going to give him a big jolt."
Voting will be staggered over several weeks, with results out on March 11, and pollsters put the BJP neck and neck with Yadav's Samajwadi Party and alliance partner Congress.
Congress, whose 46-year-old likely next leader Rahul Gandhi has campaigned alongside Yadav, desperately needs a win after a dismal performance in 2014.
Both Modi and Gandhi -- scion of the family that has dominated the Congress party for generations -- have their seats in Uttar Pradesh, underscoring the importance of the electorally pivotal state.
Observers say Modi would be judged in part on his shock decision in November to take 86 percent of India's currency out of circulation, leaving many without the means to buy essentials in the cash-dependent economy.
"There will also be other factors at play in these state polls, but Modi's BJP will be judged in comparison to its performance in the state in 2014," said Ashok Malik, a fellow with think-tank Observer Research Foundation.
- Much at stake -
With so much at stake halfway through his term, Modi has personally led the campaigning for his party instead of relying on a local face.
He urged voters to partake in the "huge festival of democracy", while painting his opponents as enablers of Uttar Pradesh's notoriously corrupt elites.
"Criminals rule the roost in UP. There is so much lawlessness all around," he said in a speech Saturday, referring to the state by its popular acronym.
The first phase saw queues snaking from polling booths and Indians emerging with their fingers inked as proof they voted.
High turnouts were reported, with roughly half the 26 million voters eligible in this round casting a ballot by mid afternoon, the Election Commission of India said.
Extra women's-only polling stations were set up to encourage female voters to the ballot box, and security measures beefed up at voting booths.
There were no major disturbances reported, and extra security deployed to hotspots like Muzaffarnagar where soldiers guarded the western district's nearly 900 polling booths.
The memory of Hindu-Muslim violence in 2013 that left at least 50 people dead and thousands displaced was fresh in the minds of some voters as they headed to the ballot box.
"We don't want a repeat of the riots. All we want is peace," Mohammed Shahid, 60, told AFP in Muzaffarnagar.
In Agra, home to the legendary Taj Mahal, young voters lamented the shoddy roads, power cuts and poor sanitation rife throughout the overcrowded state.
"One of the seven wonders of the world is here but there's been hardly any economic development," Aastha Chaturvedi, a 22-year-old first-time-voter in Agra, told AFP.