Admittedly, Modi has made strides in a few crucial areas: putting India back on the global radar, cracking down on corruption and improving transparency and accountability in governance, say analysts.
"But progress on pushing through the 'big bang' reforms that many had hoped for, including on land, tax and labor laws, has been underwhelming. So far, not enough has been achieved to suggest that India can fulfil its economic potential over the medium term," said Shah.
Investors' fading optimism has manifested in the country's stock market, which has undergone a pullback in recent months. The benchmark S&P BSE Sensex is down almost 7 percent since the end of January.
One reason Modi's agenda has stalled is because his coalition – the National Democratic Alliance (NDA) – lacks a majority in the upper house of parliament, the Rajya Sabha, making it more difficult to push through contentious reforms.
"This parliamentary infighting has stalled and derailed a series of Modi's plans to revitalize India's sagging infrastructure and slowing economic growth," global intelligence firm Stratfor wrote in a recent note.
Read MoreModi's maiden year: 10 key milestones
In an effort to maintain momentum, Modi has focused on securing diplomatic and economic victories abroad.
He has gone on more than a dozen official visits to strengthen ties with neighbors and world powers, from China to the United States.
"Although Modi has attempted several charm offensives throughout the year, his domestic policy quagmire has kept many potential diplomatic and economic breakthroughs from developing further," Stratfor said.
"Bilateral visits with Japanese, American and Australian heads of state have generated billions of dollars (in investment pledges that have yet to be actualized."
Maintaining the domestic support and good will that Modi has enjoyed over the past year with will be a challenge, say analysts.
"Sustaining that optimism will not be easy," said Radhika Rao, economist at DBS Research.
"GDP growth should rise but not as quickly as many expect or hope. In fact, some of the reform measures, including subsidy rationalization, smaller hikes in support prices and a clampdown on black money could crimp growth in the short-term," she said.