Compare it with previous true people-cars
the Ford T, Citroen 2CV and Volkswagen Beetle.
They all had big tires to be used in dirt roads.They were even better off road than some 4WD vehicles.
No wonder Tata "doesn't intend" to sell the Nano outside India.
Nobody would buy it. It only sells in india as Tata pressures (bribes) some banks to provide easy loans for people who won't qualify for the loan otherwise, and probably won't pay it back. Sort of automotive subprime lending.
Add to all this its dismal quality.
Compare it with the though Ford Ts, Beetles. Qualitywise even the 2CV surpasses the Nano.
Although I must admit making the Nano rear wheel drive was a wise decision.