Until a game-changing election on May 16, India had been a laggard among Asia's markets, which have been advancing at a fairly strong clip since earlier this year. The victory of a coalition led by a recharged Congress Party, which won 262 of 543 legislative seats, brings the promise of long-awaited economic reforms, reduced corruption, and a younger, more vigorous leadership. The news drove the Indian equity benchmark Sensitive Index, or Sensex, up 17.3% on May 18 and has people taking a closer look at investment opportunities on the subcontinent.

Those opportunities are abundant, ranging from financial services to infrastructure to consumer goods and private education, says William Nobrega, a managing partner at Miami-based Conrad Group, which provides business consulting and investment banking services.

India's economy has had investment pros worried, with recent reports showing the country experiencing its biggest production decline in 16 years, and declines of 33% for both imports and exports, in the first three months of 2009. The International Monetary Fund said it expects the economy to grow by 5.1% in calendar 2009, vs. a rate of nearly 9% between 2003 and 2008. India needs to keep gross domestic product growing at 8% or more in order to continue to eradicate poverty, says Nobrega; he estimates current growth at 4% to 5%.

Business Reforms Expected Just 10 seats short of a majority of 272 seats, the Congress Party-led United Progressive Alliance doesn't need the support of the Hindu Nationalist or Communist parties, both of which have long blocked the Congress Party's attempts at economic liberalization, says Nobrega. The new government should have the smaller centrist parties clamoring to join and fill the remaining 10 seats needed to form a majority and push through reforms, such as removing caps to foreign investment in and ownership of Indian businesses. "This shows that Indian democracy has finally come of age," says Nobrega. "In the past, it's just been coalition after coalition or radical right or radical left, like the Hindu Nationalists and the Communist Party," whose corruption had become a growing frustration to the electorate.

Another much-needed area of reform will be private education, which has become entrenched as part of Indian society but couldn't expand due to opposition to for-profit alternate providers from outside the Congress Party.

However encouraging the political signs, Nobrega sees the surge in the stock indexes as overdone. "The earnings don't support it. I think there's a little exuberance going on," he says.

A Chance to Catch Up Over the longer term, however, he expects the more liberal government that was voted in to provide a major push for India's business fundamentals and growth trajectory. After years of frustration among the Indian populace about its progress compared with China, "this will help India begin to achieve the type of gains that China has done in the areas of infrastructure and foreign investment," says Nobrega.