 I'm Rory Medcalf, the head of the National Security College at the Australian National University and it's my pleasure to introduce one of the distinguished speakers at the Crawford Australia Leadership Forum which has been held here in Canberra over the past few days. It's Vijay Alata Reddy, I'm a National Deputy National Security Advisor and a very senior former Foreign Service Officer from India. Really pleased to see you here in Canberra, I thought we'd have a conversation about really where India is going under Mr Modi, India's potential, India's challenges and what this means for the Australia-India relationship. I thought I'd start with the Australia-India relationship, actually start at the end in a way and ask you on your views on where this relationship is going, what's its potential, what are the obstacles and challenges ahead? Well, I think the relationship has grown remarkably well, you know, I've been following it closely I would say for the last six or seven years when I was working in the Foreign Ministry and looking after India-Australia relations in addition to other countries in the region and later as Deputy National Security Advisor as well we had some very interesting conversations with Australia. I would say that the relationship has done very well on the political level because you've had a lot of high level visits, you know, all your Prime Ministers in recent times have visited India and some more than once, you've had a hugely successful visit by Mr Modi here in November last year and I would say that if you were to take the level of high level visits or the number of high level visits as the measure, this is certainly a very successful relationship, it shows the importance that Australia and India give to each other. Having said that, what do I see as the potential? As we were discussing earlier today, Rory, my own feeling is that we're a perfect fit when it comes to natural resources because Australia is blessed with an abundance of them and you're definitely going forward to try to develop them even further for export. India is a perfect market for you, India is hungry for natural resources, we're a very energy deficient country, we see ourselves as quadrupling our energy output over the next, I would say, 15 years, we hope to do that, we really need to do that if we had to fulfil the promise that the world seems to find in India and for that we would have to make huge imports of oil as well as natural gas. There's been some talk about shale exploration as well, I believe, between Indian companies and Australian companies, but I think the real future will come in coal imports being increased and what I would also suggest that Australia should get involved in in a big way would be clean coal technology because that addresses the problem of pollution as well as alternative technologies and try to find a way for India to diversify its energy sources. I think a key message in this is about diversification, those of us who follow the Australia-India relationship have noticed that there have been times when it's been quite heavily dependent on one particular export, whether it's coal or whether it's education, if you can call that an export or whether it's gold. We've also been concerned I think that there's been a bit of an imbalance in the trade relationship between the two countries, so I'm interested in also your views on the wider relationship between Australia and India, not only the economic relationship but also the investment relationship, political relationship, the role of people, the societal dimension, the Indian diaspora in Australia. Do you see much potential for the relationship to change as indeed they become more Australians of Indian origin? The two countries get to know each other better and I guess there's a growing degree of strategic trust between the two countries. I would say so because I would say that yes the economic dimension is very important. We've talked about energy and imports of natural resources from Australia into India as being very important areas but equally I think the trade imbalances have started in a sense reversing because I think Indian exports have grown some and Australian exports have fallen some to India because I think there was a very huge trade deficit earlier but the overall volume of trade has dropped and frankly I don't think that matters so much because I think really investment is a better barometer of we can measure the relationship by and investments have increased a lot. Indian investments into Australia are big. Certainly India is very interested in getting more Australian investment into India and there's going to be a make in India show I understand organized by India in Australia later this year and we're hoping as a result of that much more foreign direct investment from Australia would come into India and we've all heard about the big ticket deals, the Adani, the GVK investments in Queensland and the mining investments but I think the real issue is again you know we shouldn't get stuck just into one or two areas like energy natural resources or mining I think we need to look at a wider basket of areas where we can be involved and certainly education and skills training is very important. I actually do think education can be made into an economic indicator as well because when a government earns a lot of money or when a country earns a lot of money from attracting foreign students in a sense you contribute to the GDP of the country and that's what happened with the big influx of Indian students there were obviously some anomalies in that situation some fly-by-night institutions and perhaps some students who weren't really students but I think all of those issues have been addressed very well after certain unfortunate incidents in 2010 and 11 I think we've actually evolved a system where the two sides talk to each other very clearly about this of the where I see us bringing real value and depth into this relationship is on defense issues and strategic issues I think you need to build trust between strategic partners it's not just enough to sign a joint agreement or make a joint statement saying that we are strategic partners and I think the surest way you can show that trust really exists is by having a strong defense relationship I'm delighted that Australia and India are going to have their first bilateral naval exercise in the Bay of Bengal in September this year I think that's the way we should go I think we should Australia should be even more engaged in the Indian Ocean and India should be more engaged in perhaps in the Pacific area together with with Australia and maritime cooperation is very important and I see that navy to navy talks have recently taken place defense cooperation talks have recently taken place I think all of these and we are expecting the chief of naval staff later this year so these are excellent and I think sharing of intelligence to to combat terrorism in both countries is important so I would say security dialogue would be important to to establish as a as an institutional arrangement between the two countries and I would say that these would be ways in which we could add strategic depth to our relationship you know develop the the defense cooperation further go in for research and development joint development joint production in some cases transfer of technology I think these would be important issues now that's um that points to quite a logical Indo-Pacific strategic partnership between the two powers and there are there are many who would like to see that happen but I'll go to a my final question go to a wider political canvas if you like and look at India's own future which I think many of us are fascinated by not least since the election of Mr Modi last year now he's had one year in office he's been in the eyes of many foreign observers something of a rock star on the international stage a little bit more subdued in the way he's gone about reform at home if I can put it that way what do you see as the future calculations of the Modi government in terms of the balance between reform domestically ambitious foreign policy and simply the electoral calculations or securing power and getting re-elected it's a lot to think about it is but I think the foreign policy perhaps is the easiest one to to deal with first because I think the the way the Modi government has gone about projecting foreign policy has been very coherent they've very clearly made it a point to look at neighbors look at the extended neighborhood as well in terms of Southeast Asia and Australia for instance East Asia and certainly to look at the major powers and you know he's by Modi Mr Modi has paid visits to the US to China he'll be going to Russia later this year and they've been incoming visits from a number of these countries so I would say that the foreign policy aspect has been well taken care of there are of course certain problems particularly in our immediate neighborhood with Pakistan and the situation in Afghanistan but these have been long-term issues which every government has grappled with and I'm sure Mr Modi and his government will find their own way of grappling with them but I would say overall foreign policy has been a success story so far and I expected to continue on the domestic front I think there are more challenges there was more expectation of immediate on the ground change from the average Indian and perhaps it's natural you know that one year is not a very long time particularly when you think that the term of the Indian government is for five years provided you survive in parliament of course and perhaps one year is really too early to judge but there's a feeling that change hasn't come as quickly as expected and so I think that's something the Modi government is to watch out for they have managed to push through some some issues but a lot of them have stalled in parliament because of the lack of a majority for the ruling government in the upper house perhaps after the major state elections coming up in the next few months that balance may change in the upper house which would maybe make it easier for the government to push through some of the essential reforms some of the legislation and some of the reforms they're planning are really very major and I think they will be contentious and my own feeling is there has to be a more consensual style of negotiation with other parties in parliament and a little bit of stepping back from we have the majority so we're going to push it through because there really are a number of issues where it is possible to carry all the political parties along as a matter of national interest and I would I would see that as a wise way to go so I think I covered the foreign policy and the domestic angle and as far as the role India will play in the world you know I think India is definitely going to be a major regional power and whether it will emerge as a major global power remains to be seen my own feeling is they would always be counted in the top few countries but you know at the moment with the multipolar world emerging it's very hard to say which of the large major economies is really going to emerge in the number three position it's quite clear that in the foreseeable future the US and China would certainly be in the top two but where India would be exactly we would be delighted to be anywhere close to that position but I think that we would settle for a good internal development of the country addressing our developmental challenges maintaining a good foreign policy balance and emerging as a stronger and a better engaged player on the global scene would be what I would see as reasonable reasonable ambitions for this government it's a very long game I'd like to ready thank you for your insights and we look forward to speaking with you again