If ever a country needed a vote of confidence, India did last week. A plunge in stocks listed on Bombay's main market index continued, vaporizing some $87 billion in investor wealth in just four days and raising doubts about the sustainability of India's boom. But then came a spot of cheer: IBM—which already has 43,000 workers in India—announced plans to invest a further $6 billion there over the next three years. IBM's commitment was a reminder that India—once shunned for its hapless protectionism, suffocating bureaucracy and all-round commercial torpor—can no longer be ignored. The country's growth rate is now approaching that of Asia's other economic juggernaut, China. And, as our special report in this issue shows, India is being remade, as it is increasingly integrated with the global economy. IBM is far from alone in its desire to tap the country's youthful, technologically literate workforce. Multinational companies including Nokia and Hyundai Motor have moved in, at the same time as India's domestic success stories—among them outsourcing giant Infosys and the Tata group industrial conglomerate—are shaking things up around the world. Cities such as Bombay are buzzing with rude health, while small-town India is changing so fast, former residents can scarcely recall the rice fields now buried beneath shopping malls.

IBM chief Palmisano in India, June:06

We've witnessed Asia's economic tigers and dragons. Enter the elephant.

Yet India's stock-market slide may be trying to tell us something: Elephant traps ahead. Prosperity and progress haven't touched the 5,50,000 villages where two-thirds of India's population live. In many ways, the country is growing in spite of itself. Millions of women are not getting the education they need. Transportation networks and electrical grids, which are crucial to industrial development and job creation, are so dilapidated it will take many years to modernize them. Businesses are less fettered than they were when liberalization began 15 years ago, but some parts of the economy remain subject to the old restrictions. "Right now, India is like a runner without shoes," says Rakesh Jhunjhunwala, a billionaire Bombay stock investor. "But look at that speed." Speed is good, as long as you can go the distance.