The article mentions that Tata is putting Nano to market at the price tag of Rs 1 lakh.
Due to this, car becomes an affordable commodity to a lot more people in India than it were before. As Deepak said, it would have a lot of impact to the already congested traffic situation in most of the cities. My interest though is what effect Nano would do on the economy?
The credit crunch in US has affected India. Reason could possibly be the involvement of India in IT industry. A change in one market of a country would spread to the other markets of that country.
Since more people are able to buy a car, there is possibility of new markets opening up. Even those who are not able to do a full down payment, owing to the fact that the amount is much lesser than before, they will try to buy the car acquiring a loan. This is one of the direct impacts I can think of. This seems like a good time for investors.
Nano may be a small variable, but it would be interesting to see to what extent the wheel turns the other way due to a chain-reaction.