Reform Comes Slowly to India's Business Environment

Downpours across central India have eased fears of drought spurred by weak rains earlier in July. But India's ruling Bharatiya Janata Party (BJP) is unlikely to see similar relief during the parliament's summer monsoon session slated to begin July 21. Several scandals surrounding an entrance examination cheating ring that involved senior party members is dominating the headlines, putting Indian Prime Minister Narendra Modi's government on the defensive. With the summer parliamentary session approaching, opposition parties led by the Indian National Congress Party have forced the BJP to focus on defending its politicians rather than promoting its proposed landmark bills addressing labor reform, foreign investment caps and contentious revisions to India's much-debated Land Acquisition Bill.

In the wake of India's disappointing economic performance in June, the monsoon legislative session seems likely to result in political impasse rather than reform. Still, the BJP's attempts to negotiate with the country's unions and opposition parties indicate that Modi and his party have moved beyond trying to leverage an unreliable majority to implement change, instead accepting gradual reform rather than sweeping changes to India's business environment.