The component of the business environment that resulted in the relaxation of the ban imposed on foreign direct investment is the Political environment.

Political Environment
The political environment of a country plays a significant role in shaping its economic policies. The government's policies and regulations have a direct impact on the business environment of the country. The political environment consists of the government, political parties, and their ideologies, laws, and regulations, and the relationship between the government and the business community.

Relaxation of Ban on FDI
In the case of the relaxation of the ban on foreign direct investment, the political environment played a crucial role. The Indian government, which had imposed a ban on FDI in many sectors, decided to relax its policies in the late 1990s. The government realized that the country needed foreign investment to boost its economic growth and development. The relaxation of the ban on FDI was a result of various factors, including:

- Economic benefits: The Indian government realized that foreign investment would bring in capital, technology, and expertise, which would help in boosting economic growth and development.

- Liberalization policies: The Indian government had initiated several liberalization policies in the early 1990s, which led to the opening up of the Indian economy. The relaxation of the ban on FDI was a part of this liberalization policy.

- Competition: The Indian government realized that foreign investment would lead to increased competition, which would benefit the consumers in terms of better quality products and services.

- Political stability: The Indian government had achieved political stability in the late 1990s, which gave the government the confidence to relax its policies on FDI.

In conclusion, the relaxation of the ban on foreign direct investment was a result of the political environment in India. The government's policies and regulations played a crucial role in shaping the business environment of the country, and the relaxation of the ban on FDI was a part of the government's efforts to boost economic growth and development.

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