Realising India's potential

IN WHAT WAS probably a badly timed visit, coinciding with the U.S. President, Mr. Bill Clinton's historic tour of India, the Australian Foreign Minister, Mr. Alexander Downer, has tried to revive bilateral relations. Ties with Australia, as with some of the Western countries, took a beating after the nuclear tests in May 1998. After two years, Australia has perhaps realised that it cannot afford to ignore an economy like India's. Its investors have got a feel of the market and opportunities here and do not want to miss the openings that the second generation of reforms may throw up. Investors from Down Under have already entered the port sector and now taken a stake in a telecommunications company. A number of projects in the power, mines, environment and information technology sectors are in the pipeline and may materialise in the near future. Though last week may not have been the best time for Mr. Downer to visit India and meet up with the political leadership, he has managed to accomplish quite a lot during this trip. With the Commerce and Industry Minister, Mr. Murasoli Maran, scheduled to lead a delegation to Australia next month and also co-chair the Joint Commission meeting, the time appears ripe to strengthen economic cooperation.

Even four years ago Australia made a determined bid to provide a new focus to its ties with Asia, by moving west of Southeast Asia and forging a bond with India. Several Ministerial visits have provided that focus and the private sector from Down Under has taken a good look at India and the opportunities it offers. Bilateral trade has gained momentum. The two countries have been working together in various international fora, notably the WTO, the Commonwealth, Indian Ocean Rim and ASEAN. They have common perceptions on certain issues and agreed to disagree on others. Mr. Downer's endorsement of India's position of opposing the linking of labour and environmental standards to trade in the WTO marks a new appreciation of the concern of developing economies. The failure of the WTO Ministerial meeting in Seattle because of the lack of consensus and the anxiety of countries such as Australia to launch a new round of multilateral negotiations under the WTO may be responsible for the understanding of these concerns. Whatever the reason, if a majority of the industrialised countries agree to keep these sensitive issues out of the WTO and confine its agenda to genuine trade issues, it may be able to show better results.

During Mr. Downer's visit at least three key areas for cooperation have been identified - IT, telecommunications and defence. Australia has agreed to revive its defence ties and cooperation with New Delhi, after suspending these programmes in the post-Pokhran phase. But it is in IT and telecom that the Australians are looking for partnership. Having missed the first round of openings in the telecom sector, leading Australian firms must be eager to get a foothold in the vast Indian market. Similarly, sensing that Indian IT companies have spread their wings to Southeast Asia, Canberra may be hoping to create a web of joint ventures with leading Indian software companies to tap into the expanding Asia Pacific market. Some of the new Indian IT companies may also welcome Australian capital and a Sydney base to expand their horizons. It may cut costs to operate out of India and provide software solutions to the East Asian and south Pacific markets too. Making use of this renewed Australian interest, New Delhi must seek Canberra's support and cooperation in making the Indian Ocean Rim Association for Regional Cooperation a success. Except for the growth in its membership, not much progress is being made in the forum. It badly needs some focus, direction and leadership, which India and Australia together can provide.

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Section  : Opinion
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