Modi Has Chance to Redefine Indian Politics: U.S. Think Tanks

"Institutional investors have already been jumping back into India, with the expectation of a BJP victory. But it is unclear if the BJP will roll back some of the specific policies (tax, patents, local manufacturing mandates) that have angered a vocal minority of U.S. companies," Rossow said.

However, Rossow said the government-to-government relations will start slowly, particularly those involving the U.S. Department of State, due to the visa denial hangover.

"But we can expect a renewed interest in defense collaborations, combined with renewed business interests, which will, once again, drag the U.S. government's attention back toward India," he said.

Former diplomat couple Teresita and Howard Schaffer, said, "the 'Modi wave' reflects both aspirations and intense disaffection with the ineffectiveness the Congress government displayed in its second term. Expectations are high; meeting them will be an unusually great challenge."

"Government decisions can have a great impact on India's economy but some sticky structural features may not be possible to fix with short term administrative measures," they said.

Russell Green, the Will Clayton Fellow in International Economics at Rice University's Baker Institute for Public Policy and an adjunct assistant professor of economics at Rice, said, "Modi's election victory in India will be interpreted as a big win for the economy." first financial attache to India from 2008 to 2011, said during India's fast growth of the last decade, the needs of the economy for public goods like power, roads and public administration outpaced the government's capacity to provide them.

"Since 2010, a weak prime minister and corruption scandals further reduced government performance. The bottleneck has become so restrictive that investment has nearly ground to a halt," he said.

The historic victory of Narendra Modi and the BJP challenges several pieces of received wisdom about contemporary Indian politics, said Milan Vaishnav of Carnegie Endowment for International Peace.

"First, the BJP has shown an ability to transcend historical political and geographic boundaries, which have largely relegated it to a party of the north and west of India," he said.

"Second, the BJP manufactured a number of highly effective alliance partnerships, which it has failed to do in the last two election cycles. This was seen as an area where the Congress had a distinct advantage over the BJP," Vaishnav said.