India is being invaded by Kentucky Fried Chicken. That, at least, was the charge made last week by a nationalist group, which sought to shut down the fast-food chain's first outlet in India on the ground that American 'junk food' is beneath local health standards. But the cry of fowl play was nothing next to the outrage that many Indians felt when they learned that another US multinational, W. R. Grace & Co., had allegedly patented and claimed rights to their revered neem tree. Known in Sanskrit as Sarva Rogo Nivarini, or 'curer of all ailments,' the so-called miracle tree has served for millennia as a kind of comer drugstore to rural Indians. The neem's leaves and bark are used to heal ailments from acne to infections to diabetes; its seeds can become pesticides. Its twigs even make a good rustic toothbrush. As the news spread, dozens of groups held seminars and meetings to vent their anger against W. R. Grace, the Florida-based chemicals conglomerate. 'Patenting neem is like patenting cow dung!' thundered one Indian parliamentarian, George Fernades, the source of much of the agitation was Jeremy Rifkin, a vocal US opponent of genetic engineering, and Vandana Shiva, director of India's Research Foundation for Science, Technology and Natural Resources. In Washington, they and others submitted a petition to the US Patent and Trademark Office with some 100, 000 signatures asking that Grace's patent be overturned. Rifkin asserted that the company's hijacking of the neem tree's chemical properties 'is the first case of genetic c01onialism.' It's no fun being a multinational corporation in India these days. After four years of rapid-fire market openings, the nation is undergoing a convulsive backlash against foreigners. Not coincidentally, this is happening just as India is reaching record levels of foreign investment -- $2 billion already this year, double the amount in 1994. Led by the Bharatiya Janata Party and other nationalist groups, enemies of Prime Minister R V. Narasimha Rao's reformist administration are rallying around a classic Indian political banner: xenophobia. Last month a new nationalist government in the industrial state of Maharashtra reneged on a contracted signed more than three years ago with Enron Corp. to build a major power plant near Bombay. Other protests have struck Indian operations of McDonald's and Pizza Hut. Many foreign companies insist the world's largest democracy still has too much potential to pass up: Ford Motor Co., for example, last week announced an $800 million plan to build cars in Nashik. But with national elections just seven months away, things are likely to get much worse before they improve. Which of the following is the most important factor that makes Indians opposed to the patenting of the neem tree?