The main point of the Nano was to provide an alternative to motorcycles for people who needed to transport more than themselves and one passenger. Three up on a bike (and sometimes four or more) is common here in India, and obviously unsafe, especially when one or more of the passengers is a small child (also common). The Nano isn’t much more expensive than most of the common small bikes here, so it was supposed to be an easy choice for lower-income families. Unfortunately, it’s still not that popular, and the engine-fire problem it’s had hasn’t helped. More sub-micro cars can only be a good thing here, though driving skills are going to need to improve rapidly as the traffic load increases (right now, I like to say that India cribbed its traffic laws from Aleister Crowley).
as gas prices increase, this may give India a tech advantage.