Chidambaram's appointment may have bought the government a reprieve from international credit rating agencies, which have threatened to downgrade India to junk status over New Delhi's policy paralysis, ministry officials said.
But he does not have much time.
Investors, weary of empty rhetoric and broken promises, are impatient for action now.
Chidambaram has made clear he understands the importance of winning back investors' confidence.
That stands in stark contrast with his predecessor, Pranab Mukherjee, now India's president, who scared off foreign investors with confusing tax reform proposals and failed to drive through any major reforms during his near four-year term.