Keynote Address - Asia Society AustralAsia Centre - Asia Foreign Policy Update Luncheon

H. E. Mr. Yashwant Sinha, Minister for External Affairs, Government of India

Melbourne, August 29, 2003

Mr. Hugh Morgan, Chairman of the Asia Society AustralAsia Centre,Mr. Richard Woolcott, Founding Director, Asia Society AustralAsia Centre, Excellencies, Distinguished members of business and industry, Ladies and Gentleman,

It is a privilege for me to speak to this distinguished gathering assembled today, and I would like to thank the Asia Society AustralAsia Centre for making it possible. The subject of my talk today is the Dynamics of India’s Foreign Policy in a Globalising World and its Impact on India-Australia Relations.

India, in the fifty six years of its independence, has witnessed some extraordinary developments: the consolidation of the world’s largest parliamentary democracy, the establishment of an equitable social order supported by a fiercely independent judicial system, one of world’s most unique agricultural achievements, the empowerment of Indian women (my wife is here as proof of that) the powerful revitalization of scientific traditions, and the creation of a superbly capable human resource base.

We must not forget either the huge and prosperous middle-class, the outreach of a confident business community, the free and ever alert media, the development and blossoming of the Indian arts, and the great energy of the Indian entertainment industry.

Nor should we ignore the successes of the 20-million strong Indian Diaspora, who, owing to their hard work and adaptability, are among the most affluent and educated of all ethnic communities in different parts of the world they even run for office occasionally.

In achieving all this, Indians have not had to sacrifice any of their fundamental rights, their diversity, their love of tradition, their attachment to family values or their democratic and secular norms.

India, ladies and gentlemen, is more than anything else defined by the determination of her billion strong people.

Let me cite one example of how Indian skills are contributing to the success of some of our economic partners. The giant Long Term Credit Bank of Japan, which was in deep financial morass, saw itself turn around with the help of a thousand Indian professionals who completely re-engineered the banks processes in just two years. They did this at an implementation cost 90% less than estimated. The Indian company provided a complete solution, reorganizing the bank’s functions around a fresh business model based on their knowledge of financial markets, of new financial products, of modern commercial banking and accountancy, and of the complicated software and hardware to go with the new functions.

Friends, at the national level, we are expecting our growth rate to reach a stable 7% within the next one or two years, the target is 8% over the next 10-20 years. Inflation in India has been under strict control for many years now, and our foreign exchange reserves are a robust US$86 billion and racing to cross the US$100 billion mark.

India used to be a country beset with perpetual food shortages. From an importer of food grains, today, we have emerged as the seventh largest exporter of food grains in the world, it should be of some interest to Australia.

You would also be interested to hear of the recent decision of the Government of India to lend funds to the IMF, politely decline aid from a string of countries, prepay US $3 billion of our loans to the World Bank and the ADB, write off debts owed to us by several poor countries, and give aid to many others.

This then friends is India. It is an India confident of being a key player in a globalising world. And this confidence shapes our foreign policy.

Our foreign policy was and is designed to preserve our national identity as a pluralistic, democratic and secular society, defend our territorial integrity and our sovereignty, and create an environment conducive to the security and well-being of our people. We place the highest priority on developing friendly and mutually beneficial relations with all our neighbours. At the same time, we are also stepping up significantly our engagement with the rest of the world, especially the major powers.

For example, India’s relationship with China is changing in response to the dynamics operating in the two countries, as well as regionally and globally. In the last few years, our relationship has developed and diversified in many areas and at many levels. The level of mutual understanding which has been achieved is exemplified by our success in maintaining relative peace and tranquility for nearly three decades along a border which extends for about 3500 kilometres and where there are clear differences of perception. Especially noteworthy is the increased emphasis on the economic aspect of our relationship. Our bilateral trade has shot up from around US$200 million in the early nineties to around US$5 billion in 2002. This year we hope to reach US$ 7 billion. Indian business and industry have overcome their initial apprehensions of Chinese business and are strengthening their linkages with their Chinese counterparts.

Similarly, our engagement with the United States continues to grow and become more broad-based. This follows Prime Minister Vajpayee and President Bush’s commitment to complete the process of qualitatively transforming the bilateral relationships.

The strategic dimension is assuming greater weight in our relationship with the US. The National Security Strategy document, released by President Bush in September 2002, spoke about building a strategic relationship with India in a global context. We see a convergence of interests in stabilizing the Asia-Pacific region; combating terrorism; preventing proliferation of WMD and delivery systems; ensuring the security of sea-lanes; securing access to the energy resources and markets in the region; and managing consequences of instability from conflicts and failure of states.

We do not see India-US relations in the context of any other country or regional equations or even alliance systems, nor is this relationship going to be at the expense of any other relationship. At the same time, an integral part of our strategic dialogue is exchange of views on a regular basis on great powers, on countries in our neighbourhood, in other parts of Asia and other regions of the world.

If one sees the demographics and the current trends of economic growth, it is apparent that the growth of the world economy in the next decade will be powered by Asia. Asians are now focusing their policies on expanding domestic demand and investment, and not just on increasing exports. They are becoming consumers instead of remaining only exporters. The Asian consumer is set to drive global demand in the coming years, as did the American consumer in the 1990s. In this scenario, by virtue of their population and size, countries like China and India will play a significant role in the demand and use of technology, in FDI flows, and in the new equilibrium of economic power.

India and Australia have been the two countries in Asia, apart from China to have weathered, to a large extent, the global economic slowdown of the recent years. This indicates a certain degree of economic resilience that augurs well for the formation of business alliances on a long term basis. Now that we see signs of global recovery, the time is best for us to exploit the opportunities that are again opening up. To support a more dynamic and intensive trade and investment relationship, at the government level, we have together put in place the requisite agreements and structures relating to taxation, investment protection, cooperation in IT, etc.

Australia has strengths in the old economy and ambitions in the new. India has a similar profile in some respects. We do, however, still have needs in the old economy even as we have special competence in the new economy. Therein, lies the confluence of our business interests. While there have been direct Australian investments in India of the order of A$ 1 billion so, Indian investments in Australia also have been of a similar amount. Two large recent investments in Western Australia have been the A$ 650 million capital injection into a liquid ammonia plant in the Burrup Peninsula and the A$ 180 million acquisition of the Strait’s copper mine in Nifty. Indian investments have also been visible in the mining sector in Tasmania and Queensland. In the area of new economy, Indian software giants have set up Software Development Centres in Sydney and Melbourne. These complementarities of interest through mutual investment creates jobs and opportunities in both countries.

Areas with promising potential for cooperation between our two countries include IT, biotechnology, drugs and pharmaceuticals, infrastructure development, power, agricultural produce and processing, mining, oil and natural gas, water management, soil conservation and waste disposal, film and television industry, tourism and education.

But perhaps, we can try and look even further ahead. Both Australia and India have in place free trade agreements with some countries, and we are each in the process of negotiating some others. I am happy to inform you in this context that my distinguished counterpart, Mr. Alexander Downer and I agreed yesterday to establish a study group on comprehensive economic cooperation between our two countries. This expert group will look at the potential of cooperation before the 2 countries and create a roadmap for the future.

A close partnership between India and Australia is important for the peace and the stability of the Asia Pacific region. India has civilisational and historic links with the Asia-Pacific. People of Indian origin are present in almost all the countries of the region and play a significant part in the business and professional activities there. Australia has a maritime border with these countries. The fundamentals that are already in place, therefore, put us in a unique position to contribute to peace and prosperity of the region. This cooperation is particularly important since the Asia-Pacific region faces some formidable challenges such as the increasing nexus of trafficking in drugs and illegal arms, smuggling of people, armed piracy and above all terrorism.

Both India and Australia, as littoral states of the Indian Ocean, had done pioneering work in trying to evolve an Indian Ocean community. This community is yet to find its true measure of success through collaboration, but the rich opportunities for trade and commerce should not be forgotten.

Our two countries share the fundamental ideals of democracy, political moderation, opposition to terrorism, and commitment to good governance. Thus in the Indian Ocean and the Asia-Pacific region as a whole, our two countries are obvious partners in any future arrangement for a stable balance of power. From preventing failed states becoming havens for terrorism to cooperation in protecting the sea lanes of the Indian Ocean, there is scope for a broader and deeper agenda between Australia and India. The challenge, therefore, is quickly and effectively put enough ballast in our relationship.

As an international community, we are seeking to free the flow of ideas and opportunities for creating greater global wealth. But we have so far not succeeded in the fundamental matter of ensuring the security of our people, who initiate and energize this flow, and work to enable us benefit from it. The death tolls of innocent people in the attacks of September 11 in New York, in the recent atrocities in Jakarta, and in the unceasing and brutal terrorist violence in India exemplified by the bomb blasts in Mumbai recently underscore this first and essential need.

Terror crosses boundaries with great ease. But, we are hamstrung in our cooperative war against terror because some of us still have not given up our political expediencies and excuses. As an international community we are paralyzed. We cannot join hands to fight terror because we have tied ourselves up in a mesh of fruitless definitions and dialectics. If we continue to take recourse to double standards, if we continue to talk of the clash of civilizations and root causes, then we have lost the war against terror. We have let the terrorists across the globe laugh their bloody laugh again and yet again.

Terrorism is the greatest challenge to democratic societies and to world order. India believes that there can be no duality of approach in dealing with the scourge of terrorism. Only a singularity of purpose. In this context, I am happy to say that the Australian leadership shares our views, and that Foreign Minister Downer, and I were able to conclude a Memorandum of Understanding on Counter Terrorism within the framework of the India- Australia Ministerial Dialogue yesterday.

One dynamic of globalisation is the increase in students traveling abroad for higher education. India has itself become a choice destination for foreign students from Asia and Africa who come to pursue professional courses in engineering, IT, management studies, biotechnology, journalism, agricultural sciences, etc. They are aware that India provides world-class education at a fraction of the cost, and that our universities are becoming increasingly foreign-student friendly. Likewise, Australia is an important destination for Indian university students. It is in our interest to afford the student community the respect and dignity that they deserve. It is worth adopting attitudes that avoid treating every student with suspicion as a potential illegal immigrant. Otherwise, we will have scarred with early bitterness the memories of those who are the best envoys to our globalised future.

Australia is home to a small but successful community of people of Indian origin. They are proud residents of your country who have contributed to Australia's growth and progress through their commitment and hard work. They are an integral part of your multicultural ethos, enriching it and enriched by it.

There exists a strong bond in the form of our shared history during the two world wars when Australians and Indian soldiers fought and won the two world wars by standing shoulder to shoulder. The Commonwealth war cemetery in Syria, Turkey, Egypt and in many places in South East Asia are testimonies to this. This strong bondage continued later in sports and culture. Our film industry has become Australia’s tourism Ambassador in India. The Sydney Harbour Bridge and Melbourne tram are popular scenes in Bollywood movies.

Today a large number of visitors from India travel to Australia. Our businessmen, academicians and professionals seek here in Australia the most productive interaction. So when I come to Australia, I bring with me our expectation of the energy that will characterize future India-Australia relations in different fields, and of the great promise that exists in enhancing these bilateral exchanges.

I cannot but convey that my delegation considers this visit as most substantial and successful. We have been able to reinforce the bonds of our friendship and embark on new areas in our partnership. It is people who weave unbreakable ties between nations. And we are fortunate that we have such highly-skilled, dynamic, outward-looking and creative people in both our countries.

We have with us here today Mr. Richard Woolcott, whom I believe, once described India-Australia relations as defined by three C’s – Commonwealth, curry and cricket. Friends, we have now moved far ahead of the three C’s and are today in the process of forging a modern and more energetic Australia-India partnership that truly reflects the spirit of the 21st century. I am convinced that this relationship will not only enrich us bilaterally but also bring peace and security to our region.

Thank you.