Foreign investors hope India dials back policy shocks after Modi win

New Delhi, May 25 (Reuters):
Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year. Modi’s pro-business image and India’s youthful population have lured foreign investors, with US firms such as, Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.
India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp. But from around 2017, critics say, the leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervour ahead of elections. ‘I hope he’s now back to wooing businesses,’ said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms. ‘Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.’ India stuck to its policies despite protests and aggressive lobbying by the United States government, US-India trade bodies and companies themselves. Modi’s government said the move aimed to help poor patients and curb profiteering, but the US government and lobby groups said it harmed innovation, profits and investment plans.
‘If foreign companies see their future in this country on a long-term basis…they will have to look at the interests of the people,’ Ashwani Mahajan, an official of a nationalist group that pushed for some of the measures, told Reuters.
That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.
Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one official of a U.S. tech firm saying, ‘I’d rather be more worried than be optimistic.’

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