The report released by the US State Department credits India for improving religious freedom:

"The status of religious freedom improved in a number of ways. The Government demonstrated its commitment to a policy of religious inclusion at the highest levels of government and throughout society. The Government also took steps to address expeditiously the failures of the Gujarat State government to halt Hindu-Muslim riots there in 2002. Minority rights activists reported that instances of communal violence decreased as a result. The Government refused to approve the Gujarat Control of Organized Crime Act, passed by the Gujarat legislature in June 2004, and which Muslim groups feared would be used selectively against them. The Government repealed the controversial Prevention of Terrorism Act, often criticized by Muslim groups as a tool used to target them, and replaced it with a law considered to be fairer to minorities. The Government also withdrew controversial school textbooks that had been condemned for espousing a Hindu nationalist agenda and replaced them with more moderate editions, although problems lingered in some states controlled by the opposition. The National Human Rights Commission intervened in legal battles surrounding the 2002 Gujarat riots, which resulted in the reopening of 2,000 cases. The commission also directed the Gujarat state government to entrust certain cases to the Central Bureau of Investigation, support NGOs working on behalf of religious minorities, and reform the police. No states passed new anti conversion laws, and Tamil Nadu repealed its anti-conversion law."

Read the full report here:

http://www.state.gov/g/drl/rls/irf/2005/51618.htm