While the prospect of an election victory by Bharatiya Janata Party (BJP) leader Narendra Modi is fueling optimism of a turnaround in India's economic performance, questions remain about whether or not his leadership would be enough to lure foreign businesses to the country.
Factors such as bureaucratic red tape and regulatory flip-flops have been deterrents for foreign business looking to invest in Asia's third-largest economy – a market that holds a great deal of promise with a burgeoning middle class, a mammoth pool of talent and inexpensive manufacturing capabilities.
As a result, foreign direct investment (FDI) into India has lagged far behind economic rival China. FDI inflows into India stood at $28 billion last year – just a fraction of China's $127 billion, according to the United Nations.
However, India watchers say while a Modi-led government would help shore up international confidence in India it may take many months before multinational companies feel comfortable committing long-term capital to the market.
"If Modi were to become the prime minister, sentiment would turn around fairly quickly. However, FDI isn't just linked to sentiment. There would have to be some pull factors that lead investment to increase," said Sonal Varma, India economist at Nomura.