India, long overshadowed by the greater global heft and economic might of China, is enjoying a rare moment in the sun. Multinationals are on the hunt for new markets as growth falters in the emerging economies that have powered their sales in recent years. Apple, which has applied to open a flagship store in Mumbai, has become the latest to bet that India will become both more prosperous and an easier place to do business. Narendra Modi, elected on a promise to transform the economy, must seize this opportunity to harness international investment.

Apple aims to profit from recent measures that have made it easier for single-brand retailers to enter India, including a relaxation of rules on local sourcing. But this is a high-tech venture, targeting the top end of the consumer goods market. There are still huge barriers to the large-scale industrial investment India needs to create jobs for a fast-growing workforce and lift large numbers out of poverty.

So far, however, Mr Modi’s biggest achievements have been macroeconomic — aided by the appointment of Raghuram Rajan as governor of the Bank of India. Inflation has been tamed, the rupee has stabilised, interest rates have come down and the International Monetary Fund expects growth of around 7.5 per cent to be the fastest of any large economy this year. India is not burdened with the large dollar denominated debts weighing on many emerging markets; and as an energy importer, it has been one of the main beneficiaries of the collapse in oil prices.

Nonetheless, India is not immune to the global slowdown. Its export sector is already suffering; many business indicators belie the official growth figures and there is little room to boost demand through public spending.

More important, after some early breakthroughs — including cuts to fuel subsidies and raising limits on foreign investment — Mr Modi’s reform drive has been losing momentum. The government proved unable to push through a controversial land reform. It is struggling to win support for a national goods and sales tax to replace a bewildering patchwork of state and local taxes. A series of buzzy initiatives — “Make in India”, “Digital India” and the like — so far lack substance.

Now, the political climate for reform is becoming more difficult. Many of the biggest obstacles for foreign investors require action at state level; and state elections, which determine the shape of parliament’s upper house, will affect Mr Modi’s ability to pass legislation. The defeat of his ruling Bharatiya Janata party in the key state of Bihar has strengthened a sense among investors and executives that the initial drive for reform is giving way to inertia.

Even in the best of worlds, it would take many years to turn India into an investment-friendly destination, given the scale of the challenge to build infrastructure, eliminate corruption and simplify dealings with an unfathomable bureaucracy.

However, there are areas where Mr Modi could make rapid progress and signal to investors that he has not lost his reforming zeal. Simplifying the tax system — by driving the nationwide goods and sales tax through parliament — would answer one key concern of multinationals. Resolving the issue of retrospective tax demands, which has led to lengthy litigation for Vodafone and others, would be another.

It was inevitable that the heady optimism of Mr Modi’s first few months in office would be tempered by realism, but this must not be allowed to turn into disillusion. This is one of the best chances India has had to fulfil its huge potential. Mr Modi must not let the opportunity slip.