The Price Is Right.(The Last Word; Anand G. Mahindra)(Interview)

Byline: Vibhuti Patel

The U.S. dollar may be plummeting fast, but Anand G. Mahindra is moving faster. As CEO of India's $6 billion Mahindra Group (which introduced the Jeep to India and now leads the nation's SUV market), he intends to use the weak dollar to buy manufacturing plants in "bargain basement" America. On a recent trip to New York -- to invest in an Indian film festival -- the 52-year-old Harvard Business School grad expounded on the global economy, and his own ambitious expansion plans, with NEWSWEEK's Vibhuti Patel:

PATEL: India has a booming economy, a strong rupee and a vibrant domestic market. Will '08 be as strong?

MAHINDRA: RIGHT now, what worries me is not India but where the global economy is going. It's said that India and China will decouple and their growth will continue apace unabated. I don't believe that -- We're in a euphoric state with our 8 to 9 percent growth, but if the U.S. economy goes into a funk with the subprime crisis, how can we remain isolated? China is more dependent on the West because of its export growth; we're domestic focused, but if the U.S. market plunges, the rupee will appreciate. That's one of the greatest threats to the Indian economy.

The rupee's strength worries you?

It has appreciated prematurely. We're still a poor country posturing with an affluent currency: we needed to have time to build up exports, to build up competitiveness and not have it cut away in advance simply because funds are flowing in. In the old days, currencies went up as a result of a growth in exports. Reserves went up, and so the currency going up was an indication of strength in global trade. Today currency goes up because money comes in on the hope of future investment. We've gone through this phase of capitalizing on an inexpensive currency -- we've got an affluent currency prematurely.

How does this affect your acquisitions?