Never underestimates the Indian consumer.

Raman Kathuria's job is to make sure that his local Mercedes-Benz dealership never underestimates the Indian consumer again. When the car brand first came to India 11 years ago, it sent only its oldest and most pared-down models to the country – thinking that Indian buyers were not ready for true luxury. The result: After a good first year, word got out and sales dropped by nearly two-thirds. Now, manager Mr. Kathuria imports Mercedes's top models from Germany, custom designed for Indian consumers with massaging leather seats and infrared dashboard displays for nighttime driving. After import taxes, the cars cost nearly $250,000 each.

While its materialistic glamour revolution is still in its infancy, the new capitalist India is all about keeping up with the Kumars. At all socioeconomic levels, Indian shoppers are becoming more "aspirational," using their new wealth to buy status in a country where social cachet is a vital commodity. Fifty years of postindependence socialist policies allowed few imports and yielded consumer goods that were usually scarce and shoddy. But the new, open capitalist mentality seems to fit India like a tailored Burberry glove. In this strongly stratified society, where the differentiations of caste, class, religion, and birthplace still linger, consumerism can in some ways act as a means of maintaining clear lines.