A sizzling economy remakes India: shopping malls, technology, and Western-style consumerism are transforming the nation of Gandhi.

• Author: Waldman, Amy
• Position: International

Tarun Narula, a 25-year-old computer instructor, celebrated Mohandas K. Gandhi's birthday on October 2 by going to the Metropolitan Mall. So did so many thousands of others that the parking lot was full, as were those of the other two malls across and down the street. Indian-made sport-utility vehicles, cars, and motorcycles fought for space, choking the roads of Gurgaon, a city south of India's capital, New Delhi.

Inside the malls, young people in Reeboks sipped coffee at Barista Coffee, the Starbucks of India. They wandered through Indian department stores and stopped for snacks at McDonald's and Subway. Moviegoers chose between Boom, a Bollywood (India's Hollywood) film with a decidedly Western touch of vulgarity, and 2 Fast 2 Furious

This is no longer the India of Gandhi, who helped his nation (and Pakistan) win independence from Britain in 1947 and was famous for his simplicity and austerity. The change in values, habits, and options in India--not just from Gandhi's day, but from a decade ago--is undeniable, and so is the sense of optimism about India's economic prospects.

Much of India is still mired in poverty, but just over a decade after liberalizing its economy and opening to foreign trade and investment, India is booming. The surge is based on the strength of its industrial and agricultural sectors, rising Indian and foreign investment, and American-style consumer spending by a growing middle class, including those under age 25, who now make up half the country's population. After growing 4.3 percent in 2002, India's economy was expected to show close to 7 percent growth in 2003. Only China has been growing faster.

10,000 MOTORCYCLES A DAY

The growth of the past decade has put more money in the pockets of an expanding middle class, 250 million to 300 million strong in a country of 1 billion. India is now the world's fastest growing telecom market, with more than a million new mobile phone subscriptions sold each month, indians are buying about 10,000 motorcycles a day, and the Bombay Stock Exchange recently hit a three-year high.

The potential for even more growth is enormous: In 2001, according to census figures, only 31.6 percent of India's 192 million households had a television, and only 2.5 percent a car, jeep, or van.

After huffing and puffing in place for eight or nine years, "the train has left the station." says C. K. Prahalad, a professor at the University of Michigan Business School, speaking of the Indian economy.

For decades after independence from Britain, the Indian government kept the economy on a tight leash; most industries were state owned, private investment was strictly regulated, and the government set prices on goods and commodities such as grain and cotton.

In 1991, things started to change. India began opening its economy by reducing red tape, lifting restrictions on foreign investment, and reforming its financial sector, including loosening the grip of state control. The changes are...