India has had a great run of economic growth since the opening of the economy about 20 years ago, with accelerating growth increasing from about 5% growth rate in 2000 to 7-9% between 2004-11. Its stock market has kept pace, returning 16%+ compounded return rate over last 25 years. Foreign direct investment has grown dramatically, and the effect of outsourcing of jobs has created a job boom in its urban centers, creating a boom in consumption of automobiles, mobile phones, durables like refrigerators and washing machines, as well as housing and construction. After 20 years of making mostly the right moves, the Indian economy and government is bumping against some deep structural and social limitations, which if not addressed, will significantly raise the risks of investing in India today.

• Need for greater transparency in large projects: Absence of transparency is causing delays, misdirection of funds, and preventing private investors from taking an active role in the implementation of major infrastructure, energy and food production and security projects.
• New areas such as Retail are ready for foreign direct investment, but have not been opened up yet due to political expediencies.
• The economic boom has reached about 30% of the population, a significant improvement over the 10% that used to enjoy a reasonable lifestyle, but still leaves 70% of the country untouched by the boom, though there is some trickle-down effect.
• Political and bureaucratic structure still focused on yesterday's problems of foreign-exchange reserves and food sufficiency - as opposed to taking on the next generation of challenges including focus on urban development, and agricultural sector enhancements.

In short, there are a significant set of reforms now needed for India to continue on its path to fulfilling its potential and to continue to be an investor's friend, or else be confined to a nation with plenty of promise, with limited achievements to show for it. As investors, it is important to see if the political establishment develops the will to create these reforms and propel the country forward. Otherwise, India will not be a place to bet long term, instead the focus would be limited to specific companies that are allowed to operate in its domain in a relatively free economic fashion.