The coalition government of India is dominated by the Bharatiya Janata Party. Its policy preferences are held hostage not just by minor coalition partners, but also by the purists within the party. Religious nationalists embarrass the government by attacking Christians for being un-Indian; economic nationalists challenge market opening policies. Ironically, their combined efforts damage the national interest.

A group of militants has been determined to prove that Hindus can match the Taliban in discrediting a great religion. The greater worry is that the campaign against Christians may represent a calculated ploy by the BJP, which is committed to refashioning the Indian polity in the image of "Hinduness."

Much of the party's success in the 1990s was achieved on the back of an anti-Muslim campaign, whose climax was the destruction of the 16th-century mosque in Ayodhya in December, 1992.

Interpretations of the more recent attacks against the Christians vary. The charitable argue that the party extremists have decided to reclaim the militant Hindu identity. They point to the discomfort caused to moderate prime minister Atal Bihari Vajpayee and his denunciations of the attacks on Christians.

The cynics respond that the good cop-bad cop routine is an old one. The real target of attacks is Sonia Gandhi, leader of the opposition Congress Party. Indians have accepted her as the nation's daughter-in-law, and therefore as the inheritor and preserver of the family traditions, honor and culture. Her defense of the Christians allows the BJP to draw the people's attention to her Italian Catholic identity. This is then merged with the Muslim support for the Congress in an effort to rally the nationalist sentiment and sow doubts about how reliable Gandhi would be in defending Hindu India's interests against an international Muslim-Christian conspiracy. In constituency-level street fights BJP candidates ask voters to choose between "Rome rule" and "Rama rule" (Rama being one of the main Hindu gods, and "Rama rule" being a popular metaphor for an idealized state of affairs).

If the cynical analysis should be true, the BJP may have mounted the same tiger of religious nationalism that has destroyed former Yugoslavia and devastated Sri Lanka. This would be an ironic legacy of a party committed to building a strong Hindu nation. But then, irony is never the strong suit of religious chauvinists.

The challenge for the Government of India, regardless of which party is in power, is to return to an inclusive vision which accommodates legitimate rights and aspirations of Christians and Muslims without alienating the Hindus. This requires policies that promote secularism without pandering to the fundamentalist elements of any religion.

Opposition to liberalizing trade and investment policies on grounds of economic nationalism is similarly damaging to the national cause. India still suffers from a reflexive antipathy toward multinational corporations. Foreign investment will improve the Indian industry's access to higher technology and modern managerial and marketing skills; stimulate domestic competition that has been constricted by import, entry and exit barriers; improve domestic quality control standards; create more employment; and enhance competitiveness.

India entered the new century with more poor people than its entire population at independence in the middle of the last century. To the destitute, pretensions to great-power status by India's leaders ring hollow. Continuing economic failure leaves India hostage to outside criticism and pressure; economic success will transform it from a dependent to a self-reliant nation. If a liberal and open market-oriented economy brings rapid economic growth, then it is precisely this strategy that will reduce India's dependence on international capital. The historical baggage of the East India Co., which generates the Pavlovian response of "Yes, but" to foreign investment, must give way to a more enthusiastic "Yes please!" Only so can the poverty trap be broken.

Foreign investment remains stuck well below the levels flowing into other emerging markets. India has the attraction of a sizeable market and a plentiful and cheap labor force. But foreign investors also look for productive labor; managerial, technical and operational skills; access to world-price inputs free of tariff distortions and bureaucratic controls; an expanding domestic base of suppliers and services; reliable and efficient infrastructure; and political stability and policy predictability.

India needs to devote more resources to education, skills and training as well as strengthening power, transport and communications infrastructures. Indians like to boast of being an emerging IT superpower. While most are aware that the volume of foreign investment flowing into China exceeds that into India several fold, they are shocked to discover that Internet connectivity is similarly lopsided between the two countries. And China is fast catching up in English-language competency.

The administrative culture in New Delhi and all the state capitals needs to be transformed from hostile and suspicious to helpful and welcoming of foreign investment. Elite bureaucrats tend to be as arrogant in dealing with the public and corrupt in dealings with business as they are sycophantic toward their political masters.

Redundancies are a crucial component of competitiveness in a dynamic economy; India's inflexible labor laws make shedding of surplus labor difficult and costly. The public sector is still large, subject to bureaucratic and political interference, and infects many parts of the economy. The culture of subsidies remains entrenched, draining money that could be better invested in productive enterprises.

Investors prefer to put their money in countries with binding commitments to liberalization. Other concerns relate to inadequate legal protection of intellectual property and weak enforcement of existing laws, political confusion, protracted litigation, exchange rate risks, land acquisition problems and layers of technical approvals.

Fundamentalist nationalism is indeed fundamentally anti-national.

Ramesh Thakur is vice rector of the United Nations University in Tokyo and author of "The Government and Politics of India." These are his personal views.

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