The leader of India's main opposition party said that if he's elected prime minister he'll spend the equivalent of $2 billion to procure laptops costing less than $200 each for 10 million Indian students.

The catch: To meet the affordability test, the laptops must be free of pricey applications and operating systems, such as Windows Vista or Windows 7, from commercial software vendors like Microsoft.

"The dream of a R's 10,000-laptop (about $194 U.S.) cannot be realized with preloaded, costly commercial software," wrote LK Advani, the leader of India's Bharitiya Janata Party (BJP), in a position paper published last week that outlines the party's IT vision for India.

Advani's pledge could become a reality if the BJP-led National Democratic Alliance prevails in national elections scheduled to be held this spring across India.

But what's bad news for Microsoft could be good news for U.S. chipmaker Intel. The BJP's position paper specifies that the laptops would be powered by Intel's Core2 Duo processors. The paper also promises interest-free loans to all students who can't afford to purchase a laptop outright.

Advani's promise highlights Microsoft's quandary as it seeks to expand its footprint in growth markets such as India and elsewhere around the world. Such markets hold great promise in terms of sheer volume, but their relatively poor populaces aren't likely to shell out big bucks for hardware and software.

Windows Vista Home Basic, the least-expensive version of Vista, retails in the United States for $199.95. In other words, it costs more than the entire system that the BJP envisions.

In an effort to solve the problem, Microsoft is planning a version of the forthcoming Windows 7 operating system called Starter Edition. Though prices have yet to be revealed, it's expected by some that Microsoft will set the price point for Windows 7 Starter Edition well below that of Vista Home Basic -- at least in emerging markets.

The problem: Early reports suggest that Windows 7 Starter Edition is capable of running only three applications at once. Such limited functionality may not appeal to computer users and instructors who have the option to acquire a fully functioning version of the open source Linux OS for free, simply by downloading it off the Internet.

"Our government will actively promote free open source software, including operating system, which would also introduce the habit of innovation in the student community," Advani wrote in the policy document.

InformationWeek has published an in-depth report on Windows 7. Download the report here (registration required).