A positive fallout of the unveiling of the Nano, a low-cost (US$2,500) car by Tata Motors, is that it has re-ignited the debate about urban transport in India. Proponents of motorisation have argued that the advent of an inexpensive car will usher in a transport revolution in the country while critics have warned of impending chaos on the roads and of adverse impacts on air quality, among other things. Further, several other auto manufacturers have also unveiled plans to introduce budget cars in the Indian market. Given that the penetration of cars in India is about seven per 1,000 people (as compared to 550 per 1,000 in Germany, for example), the potential size of the market is indeed enormous in a country of over a billion people. A larger issue, however, that the impending advent of low-cost automobiles has raised, is the direction in which urban transport in India is headed. This brief focuses on the current state and likely future of urban transport in the country and steps required to make it sustainable.