AUSTRALIANS should know more of Shri Kamal Nath, India's long-serving Minister of Commerce and Industry and an apostle of India's burgeoning and globalising economy. Like other Indian cabinet ministers, Nath believes Australia will eventually sell uranium to India.
I'm not sure whether the Indian Government is in some doubt about the Rudd Government's policy against selling uranium to India, which reversed Howard government policy, or whether New Delhi believes the new Rudd policy is so manifestly ridiculous that it is bound to change ultimately.
On uranium Nath said: "We do ask the Australian Government to take a practical and realistic view of this. Australia is not the only source of uranium for India but (it should be considered) in the larger context of global warming and of the broader relationship between India and Australia." Nath points out that India is not formally asking Australia to sell it uranium because the nuclear co-operation deal between India and the US has not yet been finalised, not least at the International Atomic Energy Agency. Nath is optimistic the US-India nuclear deal will go through.
He said: "In India, things go through best on the basis of consensus. We are in the process of building a political consensus. Then we'll proceed with it."
Nath remains doggedly optimistic about this deal, which would separate India's peaceful nuclear energy program from its nuclear weapons and allow the US and others to supply India with nuclear technology and materials for peaceful purposes. However, Nath echoes a common Indian view that something like this deal with the US is inevitable, even if this specific deal fails.
"After all," he points out, "the previous (Indian) government wanted to pursue it." The parties then in government now campaign against the deal from opposition, but would pursue something similar if they returned to office.
New Delhi clearly believes the Rudd Government is obsessed with China in a way that unbalances its overall foreign policy. Naturally Nath would not be drawn on such contentious matters directly, but said: "The China story is an old story now and the India story is a new story."
"China opened up early so obviously it has a head start. But in all my discussions with Australians now people talk to me of China and India. Three years ago when I was here I was telling Australians the India business story but now they're already acting on it. The India-Australia relationship will come as a very natural relationship. We share so many values, such as democracy, and so many institutions. We greatly value our relationship with Australia."
Nath wants this relationship to intensify and he has highly ambitious, specific goals. He supports a free trade agreement between India and Australia, now subject to a joint feasibility study. He has an ambitious timetable for it: "The FTA is a realistic prospect as our two economies are so complementary. We should try and conclude it by mid-2010 or even by the end of next year, looking at goods, services and investment."
There are some very distinctive features of the Australia-India trade relationship. Almost every advanced industrial economy has a deficit in its services trade with India, because of call centres.
Australia, because of the 65,000-plus Indian students here, has a huge surplus in services. Of the $2.5 billion two-way services trade, some $2 billion is Australian exports to India. Australia's overall trade figures with India are already awesomely impressive. In the financial year 2006-07, India was our fourth largest export market, after Japan, China and South Korea. It was also by far our fastest growing market, with a five-year trend growth in exports of 35 per cent a year.
It is time lazy journalists and commentators stopped using the sloppy and inaccurate term, the China boom. There is an Asia boom. But in 2006-07 we sold 50per cent more exports to Japan than to China, so we should still call our prosperity a Japan boom, even though Japan is not booming. Australian exports to Japan and South Korea were in total more than double our exports to China. Exports to Japan and India were in total almost double our exports to China. China is booming, so are other parts of Asia, and Australia's wealth, even specifically our export wealth, does not derive solely or even primarily from China. But then hysteria is never derailed by facts.
Nath is himself a formidable deployer of facts and figures. He believes India will maintain its economic growth rate of 8 or 9 per cent even if the US experiences a downturn, in part because so much Indian economic growth is now driven by domestic demand and India has substantial domestic sources of investment.
He has recently written a book, India's Century, in which the figures are at times overwhelming.
Because India's economy is so big, and growing so fast, like China's, you can produce astounding figures simply through a little modest extrapolation.
For example, in his book Nath writes that manufacturing exports from India will reach $US300billion ($313 billion) by 2015. A year later it will produce four million passenger vehicles annually. By 2015 India will be the world's second largest steel producer, with a production of not less than 130 million tonnes. In 2006-07 India produced $US15 billion worth of auto parts, of which $US3 billion were exported. By 2015, auto part exports will be $US20 billion.
India already produces 22 per cent of the world's generic drugs in value terms, and twice that in volume terms. Total market capitalisation in India moved from 27per cent of GDP in 2001 to 92percent in 2007.
Nath doesn't downplay the enormous reforms still needed in India, especially in agriculture. Hundreds of thousands of tonnes of India's food are eaten by rats each year and more than a third of its fruit and vegetables rot. But this is amenable to radical improvement with good infrastructure.
Despite Nath's politeness and positive statements, Australia has not done particularly well in India, though John Howard was a champion of the Indian relationship.
The Rudd Government says it wants a new frontier in relations with India but keeps taking decisions, such as banning uranium exports, which contradict India's interests. Australia has not been visited by an Indian prime minister in 20 years and there are but two fleeting references to Australia in Nath's book. Rudd himself made a huge point of visiting China for four days but has still not scheduled a visit to India.
If we want to join this Indian locomotive, we need to hurry up.
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