As Growth Slows, India Awakens to Need for Foreign Investment NEW DELHI - When India's finance minister, Pranab Mukherjee, flew to Chicago recently to address a group of American executives, it was to deliver an urgent message: India is still open for business. Usually a cautious speaker who offers only vague promises, Mr. Mukherjee eagerly promoted specific new deals from New Delhi, where the national government has become alarmed by the sudden slowdown of India's economy. He listed pro-business policies his government recently approved or soon would: foreign individuals could invest directly in the Indian stock market; overseas specialty retailers like Gap could open wholly owned stores in the country, and bigger retailers like Walmart would soon be admitted. And though Mr. Mukherjee did not cite it, he could just as easily have mentioned a proposal the cabinet is considering to let foreign airlines buy as much as a 49 percent stake in India's airlines. "I urge you to seize this moment and contribute to our collective prosperity in the times to come," Mr. Mukherjee told his audience, the World Affairs Council of Chicago. The flurry of activity by the Indian government has helped push Indian stock indexes up by 15 percent so far this year, and the rupee has climbed 8 percent against the dollar Skeptics wonder, though, whether Indian politics will really allow Mr. Mukherjee and his boss, Prime Minister Manmohan Singh, to force significant change on the nation's hidebound protectionism. But there is no question that after years of taking rapid economic growth for granted, the government is finally awakening to the need for new policies and greater foreign investment. The change is occurring as analysts and India's central bank conclude that growth - which was at 8.4 percent or higher for much of the last decade - will fall sharply to 7 percent in the current fiscal year and remain sluggish in the next one, which begins in April. The signs of new salesmanship from Mr. Mukherjee are a notable departure from his demeanor, and that of other Indian officials, for much of 2011, even as their economy was slowing and inflation was gathering steam. Preoccupied by a big anticorruption protest movement and internal bickering among politicians, officials tended to dismiss the gloomy data as unimportant or as temporary setbacks. But this year, Indian leaders have begun publicly acknowledging the nation's economic problems. "The growth slowdown was a nice wake-up call for us," Kaushik Basu, the chief economic adviser to the Finance Ministry, said in an interview. Although Mr. Basu noted that some of the slowdown could be attributed to global economic problems, policy makers now recognize that "decision making had slowed down, reforms had slowed down," he said. This has the saving grace of avoiding the trap of denial, which is always a risk in policymaking. And so officials are pushing ideas that would have seemed anathema just a few months ago - including the proposal to let foreign airlines buy big stakes in Indian airlines. While nationalist sentiments have long blocked such a move, steep losses at some big airlines, including Kingfisher Airlines, Jet Airways and state-owned Air India, seem to be forcing policy makers to reconsider. A new aviation minister, Ajit Singh, who joined the government in December, has been pushing the foreign investment proposal since a severe cash squeeze at Kingfisher late last year forced the airline to cancel scores of flights and delay paying salaries to pilots and other employees. Many analysts say the company, which is owned and run by the flamboyant liquor baron Vijay Mallya, probably cannot survive unless it finds new investors. Before Kingfisher's troubles became big news, bureaucrats quibbled for months about whether foreign airlines should be allowed to buy stakes of about 25 percent. Current rules do not allow any investment by foreign airlines in Indian carriers - although other foreign investors can own up to 49 percent. Soon, the Indian cabinet is expected to consider letting foreign airlines also invest at that level.