Nearly two years after Narendra Modi was elected as India's prime minister with an ambitious business-friendly agenda, the feeble pace of reforms is starting to test the patience of one of his biggest group of supporters: foreign investors.
Long overshadowed by China's spectacular rise, Modi's powerful electoral mandate stirred hopes that India finally had a leader capable of boosting its underwhelming investment climate and stolid global image.
However, in a disappointingly reminiscent narrative of previous administrations, partisan politics and a hostile opposition have stalled Delhi’s reform push, including delays to legislation on an important goods and services tax sought by businesses hamstrung by existing, cumbersome levies.
Foreign investors are showing their displeasure by heading for the exit, dumping a net $2.4 billion in shares this year - the second-biggest outflows in Asia excluding China, according to exchange data around the region.
A critical test now awaits Modi on Monday when the government unveils its budget for the year starting in April, giving the prime minister an opportunity to turn around views of the likes of Sergio Trigo Paz who said that India and Mexico were no longer the darlings of foreign investors.
"These reform stories (Mexico and India) have run their course, and if anything, they are looking pricey," said Paz, who is head of emerging debt at BlackRock in London.
"A lot of overly positive expectations have been built. They need to reprice sometime, and that's what we will see."
The numbers tell the story.
The NSE Nifty has slumped about 12 per cent this year and around 24 per cent from its record high of March last year, helping to send the rupee dangerously close to near an all-time low against the dollar.
Stock prices are now lower than they were in May 2014 when Modi swept to power with the biggest electoral mandate in three decades with a promise to deliver jobs to millions of youth and to transform India as a magnet for business.
Foreign investors have also turned sellers of Indian debt with net outflows at $833.5 million. That contrasts with $54.6 billion in debt and equity investments over 2014 and 2015.
After rallying over 2014 and 2015, the benchmark 10-year bond has retreated this year, sending its yield up around 11 basis points to its highest since late August.
Some of this selling mirrors a wider downturn in global markets but foreigners are no doubt disillusioned with the slow pace of the much vaunted reform process.
Markets hope the government budget will steer spending towards sectors such as infrastructure, while reducing subsidies to contain the fiscal deficit.
Yet Modi also faces a fraught domestic environment amid widespread doubts about the accuracy of data showing India's economy grew at 7.3 per cent in the October-December quarter, higher than China.
Perhaps more saliently for investors, Modi's failure to deliver on his promises so far are also being reflected in earnings, which have failed to match expectations.
Although net profits of 303 companies with market values of at least $500 million rose 15.4 per cent in October-December from a year ago, revenues fell 4 per cent, a fourth consecutive quarter of declines, according to Thomson Reuters data.
The weaker revenues have left equity markets pricey.
HSBC, which has an "underweight" rating on Indian equities, says 12-month forward price-to-earnings ratio of 15.9 times represents a 50 per cent premium to Asia excluding Japan.
"The earnings are arguably not really justifying the valuations, and high valuations demand high growth," said Hugh Young, managing director of Aberdeen Asset Management Asia Ltd.
Analysts also warn the perception of India as being the least worst off among emerging economies will not buy it unlimited time.
"I have been investing in India too long to hold out much hope before things actually happen," said Anthony Cragg, senior portfolio manager at Wells Fargo Emerging Markets Equity Income Fund in Denver, Colorado.