LONDON: Anyone who had invested in the Indian stock market over the past five years would have been entitled to an extra special Diwali celebration. Shares on the Bombay exchange have soared, as our chart shows - one indication of the nation's growing self-confidence. The £5bn takeover of Corus, formerly British Steel, is another sign of the emergence of India as an economic force. The notion that Indian business is all Bollywood films and call centres is wide of the mark. The move by Ratan Tata, is part of a new wave of international expansion.

As India has built its economic muscle, it has ploughed heavily into Britain. Investments here rose 110 per cent in 2005-6, making it the third biggest overseas investor after the US and Japan. No fewer than 76 Indian companies have located or expanded in the UK, creating some 1,500 jobs, and more than 20 Indian companies are quoted on the London markets. Even Britain's richest man is actually an Indian -- steel tycoon Lakshmi Mittal.

Not everyone is happy. Sir Anthony Bamford, chairman of JCB, would rather Corus was taking over Indian rivals and believes the Tata takeover will harm British manufacturing.

India's new economic strength is a challenge to the West. The flipside is that it should also offer great opportunities for British companies.

It is a huge market and, unlike China, which has an ageing demographic because of the one-child policy, it has a young population. Again, unlike China, it is a vocal and opinionated democracy - as one Mumbai executive quipped at a City dinner last week, if you ask 10 Indians a question, you will get at least 10 views.

The problems of poverty and the need for better healthcare and education remain, but the economy is forecast to expand by more than 8 per cent this year, and there is a rapidly expanding middle class that is keen to buy consumer goods and services.

There has been no problem attracting Indian investment to the UK, but too much of the traffic is one-way. British firms are unable to capitalise on our affinities in language, law and culture because of restrictions on foreign investment in a number of sectors, including banking, telecoms and retail.

Tata can take over Corus without any sabre-rattling from politicians or regulators. British-based Standard Chartered, however, has trouble even opening new branches in India, let alone buying a local bank.

Tesco is another UK company that would dearly love to open up shop, but is stymied by curbs on overseas ownership. Retailers that sell a single brand can open stores, but supermarkets have to jump through hoops.—Dawn/The Observer News Service