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Asia's Next Emerging Giant?: Political Change and Economic Reform in
India
Dr Stephen Sherlock
Foreign Affairs, Defence and Trade Group
Major Issues
Introduction
A Flourishing Democracy
Economic Reform in a Democratic Society
Australia's Relations with India
Conclusion
Endnotes
Appendix
In recent years India has been undergoing a basic redirection of its
economic and strategic policy. The highly protectionist economic policies
of the past are giving way to attempts to increase the country's integration
into the world market. The collapse of the Soviet Union has forced India
to build closer ties with pro-Western countries. All these developments
mean India is seeking stronger connections with East and Southeast Asia.
The opening of the Indian economy is bringing new commercial opportunities
for Australia and with India's growing involvement in the Asia-Pacific
and Indian Ocean regions, the affairs of the two countries are likely
to intersect to an increasing extent in the near future
In the Indian elections of May 1996 no party was able to win a majority.
Parliament was divided into three groupings of roughly similar size: the
right-wing Bharatiya Janata Party (BJP) and two small allied parties,
the centrist Congress Party, and the populist/leftist United Front. The
BJP formed a government but was unable to survive its first vote of confidence
in parliament. A government was then formed by the United Front (a coalition
of about six major parties and a number of splinter parties and independents)
under the leadership of Deve Gowda, with the Congress Party agreeing to
support the coalition from the outside.
India is a vast country of great social, cultural and regional diversity.
The country's democratic political system has prevented any one group
from monopolising political power, but that diversity is now becoming
the basis for governmental instability. With a disparate minority coalition
in power and an increasingly fractured electorate, India may be entering
an extended period of governmental instability just at the time when it
is undergoing a major process of economic reform.
Economic reform was seen to be necessary because of the failure of India's
state-directed, protectionist development strategy to make significant
inroads into the country's poverty. Reform was initiated in 1991 in the
wake of a balance of payments crisis. The reform process so far has been
successful in increasing the Indian economy's exposure to the world market,
increasing the flow of foreign investment and boosting economic growth
to over 6 per cent. There are, however, concerns that reform may have
stalled because of the Government's inability to tackle politically difficult
structural changes.
The Congress Party used to dominate Indian politics. It has formed most
of India's governments and it defined the mainstream consensus of the
post-independence polity-secular politics and a state-led economy. Congress
succeeded because it provided wide representation for minorities. Since
the late 1970s, however, Congress has been in continuous decline from
a grass-roots based mass organisation to a party dominated by small cliques
and dependent on populist sloganeering for its electoral success. With
the end of the Nehru/Gandhi family's leading role, Congress has not been
able to overcome its leadership problems.
With the decline of Congress, the right-wing BJP has come into greater
prominence. The BJP is the inheritor of a tradition of Hindu nationalism
which has always rejected the Congress vision of secular politics and
the protection of minorities. It has also exploited dissatisfaction with
the apparent failure of India's state-led economic policies. The appeal
of the BJP's Hindu nationalism remains confined, however, to middle-class,
upper caste Hindus of northern and western India. Its reputation for extremism
has prevented it from building alliances with other parties.
The United Front is made up of a range of disparate parties. It is composed
of parties which could be seen as inheritors of the original Congress
secularist ideas and of parties which are supported by the marginalised
groups of India, whether in caste, class or regional terms. The rise of
this coalition is a reflection of the growing assertiveness of many of
India's minority groups.
The main challenge for the United Front is to maintain the momentum
of economic reform while keeping to its promises of promoting social justice.
The benefits of economic reform have yet to be felt by India's poor. Many
of the reform tasks ahead of the Gowda government are difficult ones which
will bring immediate hardship to many of its own supporters. But without
changing the current structure of government spending, which is heavily
weighted towards subsidies to producers and consumers, it will not be
able to find capital for vitally needed investment in education, health
and infrastructure. Major structural change will place strains on India's
democratic system, but India is making significant progress in economic
development without the violence which has overcome many developing countries.
The federal parliamentary elections in India in May 1996 produced a
very uncertain result, with no party able to win a majority. Voting produced
a parliament which was divided into three groupings of roughly similar
size: the right-wing Bharatiya Janata Party (BJP) and two small allied
parties, controlling 194 of the 545 seats, the centrist Congress Party
with 136 seats, and the populist/leftist United Front, a grouping of several
parties, controlling 177 seats. As the largest party in parliament, the
BJP was asked by the President to form a government, but was unable to
survive its first vote of confidence and resigned after twelve days in
power. A government was then formed by the United Front under the leadership
of Deve Gowda, with the Congress Party agreeing to support the minority
coalition government from the outside-that is, in any key votes such as
confidence votes in Parliament.
Doubts about the longevity of the new minority government, made up of
disparate parties and dependent on the support of Congress, together with
the increased fracturing of the Indian electorate, raise the possibility
that India may be entering an extended period of governmental instability.
These are particularly critical issues because India has, since 1991,
been undergoing fundamental economic reforms which are yet to win popular
acceptance and which could cause strains within the Indian political system.
India has, in recent years, begun to re-examine the assumptions on which
its economic policy has been based. Indian policy-makers were shaken by
the collapse of the Soviet Union in 1991, an event which ended India's
most important international relationship, cut off one of its major sources
of foreign trade and marked the final shattering of what had appeared
to be an alternative model of economic development. A sense of immediate
crisis was created when the country's foreign exchange reserves fell to
critical levels in July 1991, forcing the government to seek bridging
finance from the World Bank and IMF. The loans were provided on condition
that India undertake a program of economic reform. This combination of
circumstances triggered the beginning of a series of changes in India's
economic policies which were designed to increase the country's exposure
to the world market and to reduce the role of the state in the domestic
economy.
At the same time the realities of the post-Cold War world have forced
India to reorient and broaden its international relationships. In particular,
relations with the United States, which had sometimes been frosty during
the years of the Cold War, have developed markedly since 1991. India has
made efforts to develop relations with countries in the Middle East and
Central Asia and to cultivate commercial links in Western Europe. There
is, however, still potential for friction in India's relations with other
major powers. Like China, India has shown resentment that its aspirations
to the status of a major world power due not always receive what it considers
to be due recognition. India's efforts to play a leading role in the South
Asian region have, in the past, led it into conflict with or within neighbouring
countries. The dispute with Pakistan over the disputed territory of Kashmir
is a continuing source of possible regional instability. Both India and
Pakistan are considered nuclear threshold states and both countries' refusal
to sign the Nuclear Non-Proliferation Treaty has been a cause of international
concern.
Recent Indian policy has focused on increasing the country's involvement,
both economically and strategically, in the Asia-Pacific region. This
has been manifested in India's recently acquired status as a dialogue
partner in the ASEAN Regional Forum and in the Indian Government's lobbying
to join APEC. On the economic front, the increasing openness of the Indian
economy has seen the beginnings of a flow of investment and technology
from the burgeoning economies of South and East Asia, notably Singapore
and South Korea.
From Australia's point of view these changes come at a propitious time
as the country is looking to deepen its involvement with the countries
of Asia. Australia's relations with India have traditionally been cordial
but indifferent, tinged with occasional suspicions during periods of the
Cold War. Trade between the two countries was fairly low, reflecting the
differing structures of the two economies. In recent years, however, trade
between Australia and India has begun to grow substantially, exceeding
$1.6 billion in 1995.(1) While this is still far from the levels reached
with other major economies of the Asia-Pacific, the growth in trade reflects
the emergence of some commercial complementarity between the two countries.
This paper aims to provide a broader context in which to understand
recent developments in the politics and economy of India. It examines
the origins of the main political groupings and the reasons for the recent
fracturing in the political system and the increasing difficulty in the
establishment of stable majority government. The paper discusses the challenges
presented to a minority coalition government by the still-unfolding process
of economic reform in India and briefly considers the prospects for Australia-India
relations.
Despite its uncertain outcome, the election of 1996 proved to be one
of the most peaceful and well organised in recent years, and underscored
the basic strength of Indian political institutions. India is remarkable
in being one of the few developing countries to sustain parliamentary
democracy and a lively and open political life since its achievement of
independence in 1947. Western commentators have tended to analyse every
Indian election as a crisis of democracy, but on each occasion the country's
democratic institutions and political culture have shown their resilience.(2)
Because India is such a huge, culturally diverse country, no one social
group can easily dominate the Indian polity. Representative democracy
has flourished because it has maintained a balance amongst the various
forces competing for political and economic power.
The very diversity of Indian society has, however, provided the background
to the emerging problems of governmental instability. India is divided
along regional lines: not only between the northern and southern regions
of the country which are characterised by distinct historical, linguistic
and cultural traditions, but also between the various states of the federal
Indian Union, whose borders are mainly drawn to coincide with regional
languages. To this should be added the differences between religious communities
such as the Hindus (also internally divided on caste lines), Muslims,
Sikhs and Christians, the rural-urban divide, and class distinctions between
the mass of subsistence peasants and their landlords, together with growing
new classes such as farmers producing for the market, urban workers and
the wealthy business class.(3)
The Congress Party-Dominance and Decline
Despite the country's diversity, Indian politics was for many years
dominated by the Congress Party, and to understand post-independence India
one must understand the central role of this party. Before the recent
election, Congress had been in power at the federal level ever since independence
in 1947, except for two brief occasions from March 1977 to January 1980
and from November 1989 to May 1991. Congress inherited the immense prestige
of being the main leader of India's independence struggle: the Congress
flag, only slightly modified, became the flag of the Republic of India.
Congress became one of the key binding political institutions in the post-independence
Indian state, with a strong network of party organisations extending down
to the village level where the mass of the Indian people lived. Local
Congress politicians were often local landowners and people in traditional
positions of power who used their influence to win votes, and who promised
(and sometimes delivered) benefits to their constituents through connections
in high places. From 1947 until the mid-1970s many political scientists
described India as having a 'one dominant party system'.
Secular Politics and State-centred Economy
In addition to a strong base-level organisation, Congress was also able
to articulate a vision which dominated political ideas and debate in post-independence
Indian politics. The two key aspects of this vision were secularism and
state-led national economic development. On the first, given the potential
for violent conflict inherent in India's deep religious differences, the
Congress leadership under M.K. Gandhi (usually known by the title popularly
attached to him of 'Mahatma' or 'great soul') and the first Prime Minister,
Jawaharlal Nehru, maintained a strict separation between religious and
political affairs. Gandhi and Nehru projected an image of Congress as
a protector of the rights of disadvantaged minorities such as the 'untouchables'
(low caste Hindus) and the Muslims. These latter two groups became key
electoral supporters of Congress. Secondly, Congress economic policy under
Nehru emphasised the role of the state in building up an industrial base
for India behind high protective barriers against foreign competition.
During the 1950s and early 1960s these policies succeeded in promoting
significant economic growth and were generally supported by the business
class, the intelligentsia and urban workers. Congress policies held out
the promise of economic progress for the poor, with equity in income distribution
for all communities.
The organisational and political dominance of Congress was, however,
not as total as it appeared. Although it won most elections, it was never
able to win a majority of votes. It won a majority of seats under India's
'first-past-the-post' electoral system because the opposition parties
were so fragmented. Challengers from the left, in the form of the Socialists
and Communists, gained significant electoral support, but could not shake
Congress from its central position because they really only offered modified
versions of the Congress vision. The left parties were committed to secularism
and would have liked even more state involvement in the economy. Challengers
from the right, mainly Hindu fundamentalists, had little appeal beyond
high-caste urban Hindus. The small right-wing Swatantra Party had some
wealthy backers, but could muster little electoral support. Although these
left and right parties together won more than 50 per cent of the vote,
they could not unite except in their opposition to Congress: hence the
short tenures of the non-Congress coalition governments formed in 1977
and 1989.
Indira Gandhi's 'New' Congress
By the late 1960s, cracks had begun to appear in the Congress 'system'.
From the mid-1960s economic growth began to falter as the achievements
of autarkic, state-controlled economic growth reached their limits, and
a series of poor monsoons brought hunger and even famine to large parts
of the countryside. These problems emerged just as popular expectations
of economic progress were beginning to rise and electors were becoming
more aware of the power of their vote. When even illiterate peasants began
to vote contrary to the directions of the local landowner, the power of
the village-level Congress organisation was weakened. In the 1967 election,
Congress won little more than 40 per cent of the vote, and once again
was able to form a government only because of opposition disunity.
The challenge of reviving Congress' fortunes fell to Nehru's daughter,
Indira Gandhi (no relation to 'Mahatma' Gandhi) who had assumed the leadership
of Congress in 1966, following the death of India's second (and now often
forgotten) Prime Minister, Lal Bahadur Shastri. In what was to prove a
fateful decision for Indian politics, Indira Gandhi took the Congress
Party in an entirely new direction. She perceived that the old party bosses
had lost their power to influence voters and precipitated a split in Congress
in 1969 to rid it of the old leadership. Mrs Gandhi did not, however,
rebuild the Party's grass-roots organisation, but based her resounding
victory in the 1971 elections on a direct appeal to electors using the
mass media and populist slogans such as Garibi Hatao (Abolish Poverty)
to tap into the rising desire for economic prosperity. Symbolic of the
dominant role of Indira Gandhi in the new Congress was its renaming as
Congress (I) (I for Indira). From this time on Mrs Gandhi tolerated no
opposition to her leadership within the party. Internal party democracy
withered as appointments to party posts and preselection for election
became dependent on Mrs Gandhi's support. It has been observed that she
seemed to trust no-one within the Party except her older son, Sanjay.
When Sanjay was killed in a plane crash in 1980, Indira brought her other
son, Rajiv, into politics, despite his reluctance to join public life.
Congress under Indira Gandhi lost the 1977 election in a popular backlash
against the suspension of democratic rights during the 1975-77 Emergency,
but regained power in the 1980 elections after the Janata Party coalition
government collapsed. By this time, however, Congress as an organisation
was a shell of its former self and depended even more on Mrs Gandhi's
personal charisma. The radical-sounding populism of the 1970s was losing
its electoral appeal. Measures such as nationalising the country's banks
and abolishing state subsidies to India's former aristocracy may have
had symbolic attraction, but they delivered little or nothing in real
benefits to the mass of India's poor.
In the place of such populist gestures, Mrs Gandhi attempted to win
the support of those (mainly higher caste and middle class) Indians who
resented what they saw as pandering to minorities. Congress began to voice
rhetoric which had previously been the monopoly of the Hindu right, such
as preserving the rights of Hindus and defence of the Indian nation in
the face of internal elements such Sikh separatists and external threats
such as Pakistan. While such ideas were popular in a more right-wing constituency,
they cost Congress votes amongst its traditional low-caste and Muslim
supporters, and a hard line against minorities risked stirring up conflict.
Indeed Gandhi paid the ultimate cost when two of her Sikh bodyguards assassinated
her in 1984. The guards had shared the anger of most of their community
when Gandhi had ordered the Army to storm the holiest of Sikh shrines,
the Golden Temple in Amritsar, to remove extremist Sikh separatists who
were using the building as a sanctuary.
The assassination of Indira Gandhi revealed the extent of the decay
of Congress as a grass-roots organisation and the depletion of the ranks
of its leadership. Party involvement had become attractive to individuals
with a greater commitment to personal aggrandisement than political principle.
With Indira's death there was no Congress leader of any significant stature,
and the Party found itself with no option but to try to capitalise on
the Nehru/Gandhi name by inducting her politically inexperienced son,
Rajiv, into the leadership. Rajiv benefited from his image as a youthful
fresh face untainted by the reputation for corruption which marked most
other Congress leaders, and in the wave of sympathy for Congress after
Indira's assassination, led the Party to victory in the 1984 election.
As Prime Minister, however, Rajiv failed to break with his mother's tendency
to be intolerant of independent figures within the Party and became embroiled
in allegations of kick-backs in overseas armament contracts. Congress
was defeated in the 1989 elections, and during campaigning for the subsequent
elections in May 1991 Rajiv was assassinated, leaving a vacuum of leadership
in the Party. The Party's weakness was exemplified by the serious suggestion
that Rajiv's Italian-born wife, Sonia, who had made no secret of her distaste
for political life, should take up the reins of leadership.
Congress after the Nehru/Gandhis
In the 1991 election Congress once again benefited from a sympathy vote
following Rajiv's assassination, but was barely able to form a parliamentary
majority under the leadership of Narasimha Rao. Rao was in poor health
and was widely seen as a compromise and transitional figure, but he proved
to be a more lasting leader than generally anticipated, and led Congress
through a full term of government from 1991 until the elections of 1996.
The economic reforms begun under Rao's administration did not really lose
Congress votes, but failed to bring the Party any electoral rewards because
they did not show tangible benefits for most Indians. Rao made a fitful
attempt to reform the Congress Party by holding internal elections, but
abandoned the effort in the face of strong opposition from vested interests
in the Party. His leadership was generally seen as uninspiring, and faced
with growing allegations of corruption against large numbers of Congress
leaders, Rao has been unsuccessful in stemming the loss of popular support
and respect for the Congress Party. The results of this failure were evident
in the defeat of Congress in the May 1996 elections.
Many commentators, both hostile and sympathetic to Congress, have concluded
that the Party is in a state of terminal decay. It has been observed that
without the assassination of two of its leaders Congress might not have
achieved its last two election victories. Despite leading the Party to
defeat, Rao initially retained his leadership but resigned as President
of the Party in late September 1996 after he was summonsed to court to
answer allegations of being associated with corrupt business practices.
The fact that the Party could only elect a 'provisional' President, Sitaram
Kesri, while Rao continued to lead in parliament, further highlighted
its leadership problems. Just the same, however, Congress has been a fixture
of Indian politics for more than a century and can probably maintain a
role even while drifting in a rather directionless manner. The question
seems to be whether it can once again become something more than just
one of a range of competing parties. Much of this, of course, depends
on the activities of its rivals. The following section is therefore devoted
to a examination of these other currents of political organisation in
India.
The BJP and the Hindu Right
The Hindu Nationalist Tradition
While Congress was the largest single party in post-independence India,
and its ideas of secularism captured the mainstream of debate, there were
always rival currents which rejected the vision of the Indian nation articulated
by 'Mahatma' Gandhi and Nehru. The most important of these was the Hindu
right (sometimes called Hindu fundamentalists) which saw the Indian nation
not in terms of a collectivity of communities but as an expression of
Hinduism. They saw the non-Hindu religions of India, particularly Islam,
as foreign impositions on the country, and argued that their presence
was the result of the past subjugation of India and the forcible conversion
of some of its people from their true native faith.
Such ideas were not without their adherents in Congress itself and some
Congress supporters were quietly in favour of the partition of India in
1947 as a way of ridding the country of Muslims. The main expression of
the Hindu nationalist current was, however, found in an organisation called
the RSS (initials for a Hindi name meaning, roughly, National Volunteers'
Association or National Service Squad). The RSS, organised along paramilitary
lines, emphasised discipline and service to the Indian nation, which of
course it saw as a Hindu nation. Because it was an extremist with RSS
connections who was responsible for the assassination of 'Mahatma' Gandhi
in 1949, the organisation was banned for some time after independence
and retained a stigma for many years. Nonetheless, it retained a committed
core of supporters and with its well-organised cadre structure built up
an impressive political machine which now numbers in the hundreds of thousands.
The RSS has seen itself as a cultural service movement rather than a
political party, but it has been the inspirational and organisational
core of parties which have openly campaigned on a Hindu nationalist platform.
The first of these, the Jan Sangh (People's Association), became a prominent
opposition party during the 1960s and early 1970s. Although the Jan Sangh
consistently won less than 10 per cent of the vote, together with other
opposition parties it became the driving force behind a campaign of mass
opposition to Congress which was one of the main reasons for Indira Gandhi's
declaration of the Emergency in 1975.
With the organisational and political decline of Congress, Hindu nationalist
groups began to grow in influence from the late 1970s. The role of the
RSS and the Jan Sangh in opposing authoritarian Emergency rule broke down
some of their political "untouchability" as far as other parties
were concerned. In the 1977 election a number of Congress MP's joined
together with the Jan Sangh and a couple of centrist parties and formed
the Janata Party, roundly defeating Congress and forming India's first
non-Congress government. The Janata Party coalition collapsed within two
years and Congress regained government in the 1980 election, but the Hindu
right had strengthened itself considerably and reorganised itself into
the Bharatiya Janata Party (BJP) in 1980. The BJP fared poorly in the
1984 election, but in subsequent polls improved its position in terms
of both votes and seats. In 1991 it won almost 21 per cent of the vote,
and although its support hardly changed in the 1996 election it picked
up many more seats and became the first non-coalition party to win a larger
parliamentary representation than Congress, albeit well short of a majority.
The Strengths and Weaknesses of the BJP
The social basis of the BJP is largely found in the urban lower middle
class of northern and western India. The BJP also gains support in some
rural areas in this region where its leaders from the former local aristocracy
continue to wield influence. Hindu nationalism has long had currency among
traditional merchant groups; and as India has urbanised, such ideas have
spread to the growing lower middle class, particularly those with a high
or middle caste background. The BJP's main problem is that this strong
support base is also its biggest limitation. Hinduism is a religion with
many manifestations and is socially divided along caste lines. The version
of Hinduism articulated by the BJP has appeal only amongst high and middle
caste groups in the north and west, and is strongly rejected by many lower
castes (especially untouchables). It finds few adherents at all in the
south of the country. Thus even when winning its largest ever number of
seats in the recent election, it has virtually no representation in the
southern or eastern states, including populous states such as Tamil Nadu
and West Bengal.
The dilemma for the BJP is a choice between appealing to its core support
and thus remaining limited in its social and regional base, or watering
down its ideology to win wider appeal and thereby alienating its traditional
followers. The Party did, for example, win many supporters during its
campaign, during the early 1990s, to demolish a mosque in Ayodhya in the
northern state of Uttar Pradesh because it was said to be built on the
birthplace of the Hindu god Ram. But the wave of violence which swept
parts of the country after the mosque's destruction in late 1992 turned
many potential voters away from the BJP because of its association with
extremism. Many business people, who as a group had been wooed by the
BJP, were alienated by fears that the Party's campaigns were a source
of political instability which could jeopardise economic activity. Related
to these problems has been the BJP's loss of its previous image of incorruptibility
and discipline. The BJP has campaigned with claims of being a 'clean'
party unsullied by the corruption associated with Congress, but its record
when in government in a number of states has destroyed much of this popular
goodwill. A reputation for corruption has now reached the highest levels
of the Party at the national level, with several leaders resigning from
parliament before the last election because of allegations of corrupt
practices.(4)
The increase in support for the BJP in recent elections has led some
foreign commentators to see the Party as the future dominant party in
India. With more close analysis, however, one can see the force of the
arguments of other observers who consider that the BJP may well have reached
the limits of its strength. Despite its growth, the Party remains a party
of the north and west of the country. With the exception of the Shiv Sena,
(an extreme right-wing party in the western state of Maharashtra), the
BJP has not been able to build the alliances with other parties to enable
it to form a coalition or minority government at the federal level. While
the BJP sees its version of Hinduism as the model for all Hindus (and
all Indians), Hinduism is in fact a tolerant religion whose theological
and social diversity is stronger than any attempt to homogenise it. In
fact, attempts by what are seen as upper-caste northerners to impose their
ideas on other parts of the country are resented and opposed by many Indians,
including many Hindus.
The BJP's problems in breaking out of its heartland are particularly
acute because in recent years there has been increasing politicisation
amongst lower-caste and untouchable Hindus and amongst many regional minorities.
These developments have become part of the driving force behind the third
current of Indian politics which is examined in the following section.
The United Front-The Politics of Caste, Class and Region
In the recent elections neither of the two largest Indian parties formed
a government, but power was assumed by a diverse coalition of minority
parties called the United Front, under a previously little-known (to foreign
observers at least) regional leader, Deve Gowda. Gowda was Chief Minister
of the southern state of Karnataka and state leader of the largest party
in the coalition, the Janata Dal (People's Party, not to be confused with
the Janata Party which was in power in 1977-80). The diversity of these
parties makes it difficult to outline a complete picture, but there are
a number of common currents amongst these parties which have made them
logical coalition partners.
Parties of the Marginalised
The most important common denominator of the United Front parties is
that their popular support is drawn from many of the marginalised peoples
of India. This may be understood in class terms since they tend to be
peasants, landless agricultural labourers or urban workers, in caste/religious
terms as members of lower castes or minorities such as Muslims, or in
regional terms in that many are outside the demographic and political
heartland of Hindi-speaking northern India. Recent years have witnessed
increasing assertiveness amongst many underprivileged groups in both rural
and urban India, particularly the development of a current of low-caste
peasant leaders who mobilise supporters on the basis of caste solidarity.
In certain parts of the country one or two lower castes may form a majority
of the regional population and have come together behind parties which
have become dominant within their home state. The common idea that caste
makes people passively resigned to their fate is becoming decreasingly
true, if it ever had much validity. The current Parliament has a higher
number of representatives from minorities and what are generally called
'backward' groups than at any time in India's post-independence history.(5)
The Janata Dal draws its support from lower caste peasants and farmers
in a number of states in both the north and south of the country, together
with pockets of trade union support. Many of its leaders are former Congress
politicians who became disillusioned with Congress because of its undemocratic
internal regime and because of its drift away from secular politics in
the 1980s. Many left Congress during the course of the party's regular
factional and personal disputes. Other Janata Dal leaders were members
of the socialist parties which were important rivals to Congress in the
1960s and 1970s. The Janata Dal has thus attracted many former Congress
voters or those who might have supported more leftish versions of the
Congress vision in the past. It is the United Front party with the greatest
claim to be a national party and it has most of the experienced national-level
leaders. The United Front is also supported by the smaller of India's
two communist parties, which can also be seen as part of the secular-centrist-leftist
tradition. The larger of the two communist parties, which is powerful
in the states of West Bengal and Kerala, is not part of the coalition
but has promised to support the United Front in key parliamentary votes.
The Rise of Regionalism
Other constituents of the United Front are strictly confined to a particular
state. In the case of the Samajwadi Party in the large northern state
of Uttar Pradesh, this is because the castes which tend to support it
are mainly confined to that state. In other cases, the party has become
influential because it has been able to tap into regional sentiment and
a sense of separate identity. The oldest party of this type is the DMK(6)
in the southern state of Tamil Nadu where there has been a long tradition
of regional nationalism. In the 1950s there was a violent agitation in
Tamil Nadu against the attempt to spread Hindi as a national language,
because it was seen as a threat to Tamil identity. Similarly, the Telegu
Desam Party is another regional party which expresses some of the cultural
distinctiveness of another southern state, Andhra Pradesh. There are also
a number of other regional parties from the smaller states of the Indian
Union who have joined the United Front, including from Punjab, Assam and
Kashmir.
Many commentators have questioned whether the United Front government
can survive in the long term or will break up because of internal policy
and personality differences. The precedent of the previous two non-Congress
administrations does not augur well for the future of the Gowda government,
as both collapsed well short of half a normal term in office. The United
Front's greatest weakness is that many of its leaders are ambitious and
individualistic and have a history of factionalism and party-splitting
based on mainly personalised disputes. Its main asset is that it is made
up of parties which do have philosophical commonalities and whose supporters
come from similar social and economic backgrounds. They have been able
to produce a Minimum Common Program which lays down a set of political
objectives. The Gowda government's prospects for stability improved when
the resignation of Narasimha Rao as President of Congress ensured that
Congress would be preoccupied with its own internal leadership wrangles.
Apart from the problems inherent in its make-up, the Gowda government's
greatest challenge will be to continue with the program of economic reform
begun under the previous Congress government while not compromising on
what it sees as its special goal of advancing social justice. Bringing
about major structural reform is a difficult task for any government,
but the challenges are especially acute for policy-makers in a developing
country where the groups that bear the often considerable costs of reform
cannot be ignored because they still have a voice in the democratic process.
The United Front's primary criticism of reform under Congress was that
it was taking place at the cost of the poor and was focused only on the
interests of business and the middle class. It will therefore be under
pressure from its own constituency to show that there are tangible benefits
in the continuance of restructuring and that the poor will be protected
from its ill-effects.
Maintaining Economic Reform
The economic reforms begun in 1991 were motivated by a growing perception
that the development strategy pursued by successive Indian governments
since Independence had largely failed. India maintained a growth rate
of about 4 per cent during the 1950s, with stagnation and serious drought
during much of the mid-1960s, before returning to a rate of less than
3.5 per cent during the 1970s. This performance came to be referred to
as the 'Hindu rate of growth'-not disastrous but far from spectacular
and certainly insufficient to make major inroads to the country's widespread
poverty. There were important achievements during this period: in particular
the food shortages which led to famines during the droughts of the mid-1960s
are now a thing of the past. Increased irrigation and improved productivity
from 'Green Revolution' farming technology have made India self-sufficient
in food and government-funded poverty-alleviation programs have ensured
that food is distributed to drought areas. Nevertheless, up to 30 per
cent of the population still live below the poverty line as defined by
the Indian government, although even this is an improvement over the nearly
50 per cent of two decades ago. Poverty remains especially entrenched
in many rural areas and regional disparities are a major cause of concern,
with some areas yet to benefit from the improvements of recent years.(7)
Economic growth improved during the 1980s, with an average of over 5
per cent during the decade. The reasons for this improvement are the subject
of debate, but most commentators agree that it was assisted by the limited
reforms to government regulations, the taxation system and currency devaluation
from the mid-1980s.(8) The enhanced performance of the 1980s came to an
end, however, with the massive foreign exchange crisis of 1991. Balance
of payments problems have been a persistent feature of the Indian economy,
with remittances from Indian workers in the Middle East being relied on
to compensate for the trade deficit and the cost of servicing foreign
loans. This delicate balance was upset by the Gulf War of 1990-91 which
brought the combined impact of a sudden end to remittances and an increase
in the cost of imported oil.
With external sources of financing drying up, domestic savings
as a ratio of GDP stagnant at around 20 per cent and imports not financed
by export earnings, the economy was plunged into a liquidity crisis in
early 1991. The Government was left with no choice but to make a concerted
effort to reduce the current account deficit.(9)
Faced with this crisis, the Rao government agreed to an IMF/World Bank
program of structural adjustment which provided loans to overcome the
immediate financial problems and which stipulated that the government
undertake a number of measures to open the Indian economy to greater international
competition.
Liberalisation under the Rao government concentrated on reforms in the
financial sector and in the investment and foreign trade regime. Key reforms
since 1991 have included:
- Encouragement of private sector investment with the abolition of licensing
requirements for investment in most industries and a reduction in the
number of sectors reserved for public investment;
- Elimination of the requirement for large companies to seek permission
for expansion, merger or takeover;
- Encouragement of foreign investment, with the ceiling on foreign equity
holdings increased to 51 per cent (up to 100 per cent in some cases);
- Phasing in, from 1991 to 1994, of full foreign convertibility of the
rupee on the current account, with partial capital account convertibility
(this has led to substantial devaluation of the rupee);
- Liberalisation of foreign trade, including replacement of most import
quotas with tariffs, reduction of the maximum tariff from 150 per cent
to 65 per cent, and a reduction in the number of imports subject to
licensing requirements; and
- Reform of the banking system to bring accounting and management systems
towards international norms and to make the banks (which are state-owned)
more market-oriented.(10)
The clear signs of Government commitment to reform, together with international
concessional finance, quickly overcame the immediate crisis of foreign
exchange and international investor confidence. The longer term effect
has been a steady increase in the inflow of foreign capital. In 1995 the
total capital inflow to India was over $US22 billion. Foreign direct investment
increased from virtually zero in 1990 to almost $US2 billion in 1995-96.
Portfolio investment increased from less than $US100 million in 1992-93
to $US3.6 billion in 1994-95.(11) Economic growth has been over 6 per
cent in the last two years, and projections have estimated a 6-7 per cent
rate in 1997. Industrial growth has been around 10-13 per cent in the
same period.(12)
Despite these developments, however, it remains to be seen whether the
Indian economy will be capable of sustaining such growth in the long term
and of reaching rates of growth comparable with the economies of East
and Southeast Asia. Increased foreign investment, while impressive in
Indian terms, is still nowhere near the level experienced by China over
the last decade. The poor state of much of India's transport, power and
communications infrastructure is rapidly emerging as a major constraint
on development and will require massive investment to bring it to international
standards. Despite the encouragement of private investment, the state
sector still retains a dominant position in basic secondary industry.
Most state-owned corporations are unprofitable and consume large amounts
of investment capital, but their privatisation or restructuring remains
an extremely sensitive political issue. Much of the vital agricultural
sector is still at the mercy of the monsoon, and India's good fortune
in experiencing eight successive good seasons cannot continue indefinitely.(13)
Many international commentators have expressed concerns that the United
Front government might not proceed with economic reform because of its
fragile character and because of its leftist orientation. Prime Minister
Gowda has, however, been quick to reassure international investors that
his government is committed to further liberalisation of the economy and
to attracting foreign capital. When Gowda was Chief Minister of the southern
state of Karnataka he was well-known for his efforts to promote both foreign
and domestic investment. He was also prepared to tackle politically difficult
issues such as reforming urban land laws-the avoidance of this issue by
other state governments has helped push rents and land prices in cities
such as Bombay to world record-breaking levels. Bangalore, the capital
of Karnataka, is now said to be Asia's fastest growing city and is home
to much of India's burgeoning computer software industry. Other strong
advocates of reform in Gowda's cabinet include the Finance Minister, P.
Chidambaram, who was actually the Commerce Minister under Narasimha Rao,
and the Industry Minister, Murasoli Maran, who has reportedly spent most
of his brief time as Minister simplifying procedures for the approval
of foreign investment proposals.(14) The government has, however, been
in power for five months at the time of writing and has yet to undertake
any major new initiative in the reform process. There are signs that foreign
investors are becoming wary that reform has stalled. A recent conference
on German investment in India supported by both the German and Indian
governments, for example, showed continued German investor interest in
India but indicated growing reservation about the continuity of reform.
Some investors express their frustration at the persistence of complex
regulations and slow official decision-making.(15)
Promoting Social Justice
The critical issue for the Gowda government will be to maintain progress
on economic reform while making good on its promises to promote social
justice and the economic uplift of India's poor. In many ways the Rao
government has already completed much of the easy part of the reform process,
mainly financial and trade measures which pleased domestic and international
business interests without imposing significant social costs. While the
new government has continued with reforms aimed at increasing the level
of foreign capital flowing into India, it has yet to give any indication
of a willingness to undertake changes which would affect the well-being
of electorally-important groups in rural and urban areas.
The most difficult problems confronting the United Front administration
will be fiscal policy and the role of public sector industry. Prime Minister
Gowda, like his Congress predecessor, has the stated aim of bringing about
a major reduction in the budget deficit, which is currently running at
over 5 per cent of GDP.(16) The issue, however, is not so much
the actual level of the deficit but the fact that much of it is composed
of support delivered to agricultural producers in the form of fertiliser
and electricity subsidies and high procurement prices and, on the revenue
side, exemption of agriculture from income tax. Expenditure reductions
in recent budgets have largely been achieved by cutting development spending,
while outlays on subsidies have continued at the same level. The wealthier
farmers who mainly benefit from these policies are thought to influence
the votes of large parts of the rural constituency (such as their tenants
and labourers) and successive governments have been loath to interfere
with these subsidies, even though they are costly to the treasury and
often distort the allocation of agricultural resources. The government
also provides subsidies to keep food prices low for urban consumers, a
scheme difficult to cut without a political backlash.
Restructuring of public sector industry is, similarly, a political as
well as an economic problem. The public sector employs 4.9 million people
in secondary industry and mining, which is equal to the number employed
in private sector industries of the same kind.(17) Restructuring of these
industries (including in the private sector where labour laws limit job-shedding)
would inevitably mean the loss of large numbers of jobs, with resulting
social dislocation and political discontent. Concern for members' jobs
has led many trade unions to oppose industrial reform, but equal and perhaps
more powerful opposition has come from the class of managers and administrators
which has grown up around the post-independence expansion of the public
sector.(18)
A few public sector industries are relatively efficient and some make
a profit, but the sector as a whole is poor in terms of capital productivity,
that is it requires large amounts of capital for a small increase in GDP.(19)
This has the effect of crowding out scarce capital for other investment
and pushes up interest rates, which are currently running at around 15-18
per cent.(20) These high rates are also exacerbated by government borrowing
to finance the continuing budget deficit. Inflation as measured by the
consumer price index has been in the range of 9-10 per cent in the last
two years.(21)
Apart from the macroeconomic effects of these problems, the unbalanced
allocation of resources to subsidies and public sector industries makes
it difficult for the government to direct resources into the social spending
necessary to promote the government's stated goals of social justice.
One of the most telling criticisms of the current program of economic
reform, based largely on World Bank/IMF models, is that it concentrates
on macroeconomic settings without taking human resource development into
account. Most examples of successful economic development in East Asia
have been accompanied by high levels of government investment in education
and health which boost labour productivity and the best use of labour
resources. India's performance, on the other hand, in improving primary
social indicators such as literacy, life expectancy, infant mortality
rates and access to health services has been extremely poor.(22)
While attention to such issues should be high on the agenda of a government
committed to social justice, the structure of government spending and
overall resource allocation in the economy militate against government
investment in education and health. In addition, the political culture
from which many of the parties of the United Front have come has tended
to be preoccupied with short-term populist schemes (such as subsidised
rice by the state governments of Tamil Nadu and Andhra Pradesh(23)) which
appear to benefit the poor and which reap immediate political gain, but
which do not significantly improve long-term economic opportunity. The
first budget of the Gowda government, delivered in July, was little different
from what might have been expected under Congress, including cutting spending
on development projects to limit the deficit, rather than by cutting recurrent
expenditure on subsidies or by reforming the tax system. It remains to
be seen whether the Gowda government can regain the momentum of reform
lost during the political uncertainties of the recent interregnum and
broaden the program of restructuring away from narrowly defined macroeconomic
issues towards broader social concerns.
Australia's relations with India have been consistently cordial but
rarely close. Before 1991, relations were sometimes overshadowed by differing
Cold War allegiances, but links were maintained by shared active membership
in the Commonwealth. The relationship has been characterised by long periods
of relative indifference punctuated by fitful efforts to deepen mutual
involvement. Prime Minister Rajiv Gandhi visited Australia in 1986, for
example, a reflection of the strong personal rapport he developed with
Prime Minister Hawke, but the expressions of amity and good intentions
did not lead to development of substantial new connections between the
two countries. Underlying the lack of progress was the fact that the two
countries' economies had little complementarity. Australia's traditional
strategic, economic and cultural orientation towards North America and
Western Europe also found little common ground with India's focus on its
own region and the Soviet Union.
Recent years have, however, seen the beginnings of change. The post-1991
opening of the Indian economy has the potential to enmesh with Australia's
efforts to broaden its already strong links with the countries of Asia.
Trade between the two countries has grown significantly in recent years,
reaching $A1.6 billion in 1995 (See Appendix).(24) The Indian government's
decision in 1994 to reduce tariffs on coal and wool widened opportunities
for sales of these major Australian export commodities which, in 1995,
made up 65 per cent of Australian exports to India. India's efforts to
attract foreign investment and technology for much-needed infrastructure
development is also presenting openings for Australian business. Telstra
and an Indian partner, the B.K. Modi Group, recently won the contract
to provide cellular phone services in Calcutta. As well as its telecommunications
technology, Australia's mining expertise has the potential to find a growing
role in India, with the main obstacle being slow progress on reform of
India's restrictive mining regulations.
Australia's trade and investment in India is still very low compared
with the countries of East Asia and further growth will depend essentially
on continuing economic development in India. But the Australian government
will have an important role in ensuring that the lack of attention to
India that has marked past Australian policy does not allow new opportunities
in India to be passed by. Recognition of the increasing importance of
India led the Australian Government to sponsor a major trade, cultural
and scientific promotion of Australia in India from October to December
1996 (under the title 'Australia-India New Horizons'). Although the Australian
press chose to focus on organisational problems at one cultural event,
the promotion appears to have had some success at improving Australia's
profile in India. The previous Labor government and now the Coalition
government have also recognised that developments in the Indian Ocean
region, especially in South Africa and India, warrant increased attention
as a complement to Australia's deepening involvement with Pacific Rim
countries.
The development of greater economic and strategic ties with India has
only really just begun and, for the foreseeable future they are unlikely
to assume anything like the importance of relations with East and Southeast
Asia. There will be a particular need for Australia to take account of
Indian sensitivities as it upgrades its involvement in the Indian Ocean
region. The Indian government reacted negatively to Australia's 1995 initiative
on the establishment of an Indian Ocean regional grouping because it saw
the proposal as overly ambitious and the attempt to include security issues
on the agenda as inevitably involving sensitive issues such as Kashmir
and nuclear weapons. The continuance of significant differences of approach
on some key issues was underscored by the contrary positions taken by
Australia and India over the Nuclear Non-Proliferation Treaty. Nevertheless
it would seem important for the Australian government to give sustained
attention to the Indian Ocean region to ensure that new ideas do not lapse
in the manner that has sometimes characterised Australia-India relations
in the past. The emergence of greater economic complementarity between
Australia and India, Australia's growing involvement in Southeast and
East Asia, and India's efforts to build greater links in the region suggest
that the affairs of two countries are likely to intersect to an increasing
extent in the near future.(25)
Supporters of economic reform argue that opening India to the world
economy and reducing state involvement in the economy will promote economic
growth and eventually benefit the mass of the people. While the reforms
do appear to have improved growth in the last two or three years, the
fruits of this growth have mainly been confined to some of the urban middle
class. The GDP growth of the last two years (6 per cent) will have to
be sustained well into the next decade before it has a significant impact
on India's poverty. Whether a government elected on a promise of social
justice can rely on the patience of the people of India is a moot point.
It is unlikely, moreover, that growth will be sustained unless there is
vastly improved access by India's poor to the services which promote human
resource development.
India is entering a period of major change as it turns away from many
of the economic policies which have been part of the consensus of the
country's politics since independence nearly fifty years ago. Reforming
an economy which was structured around high levels of protection and heavy
state involvement is a massive task with great promise but with many risks.
While there is the promise of benefits for many in the future, there is
also the reality of immediate costs being borne by some who can ill-afford
them. Within a democratic polity these tensions are sure to manifest themselves
in electoral politics and in increasing pressures on the country's leaders.
Most of India's parties are effectively committed to economic reform,
whatever their rhetorical position, but there does not yet appear to be
widespread popular support for the new policies.
There is usually a mismatch between what politicians are forced to promise
in a democracy and what they can actually deliver in an underdeveloped
economy. Thus many Indian parties have tended to build their support on
irresponsible populist claims or by diverting people's attention to supposed
enemies within, such as religious or other minorities. In a land as large
as India, there is a danger that these divisions can become as myriad
as the many communities of which the country is composed. The recent fracturing
of Indian politics is, in part at least, a reflection of some of these
realities. On the other hand, it is unlikely that any other political
system could contain the diversity of Indian society and maintain a tradition
of fifty years of peaceful changes of government. Few Third World countries
have made the transition to developed status without major upheavals and
violence. Despite its problems, and the prospect of instability in the
parliamentary sphere in the immediate future, India appears to have taken
some important steps towards such an historic achievement.
- Department of Foreign Affairs and Trade, Composition of Trade Australia
1995, p.170.
- Sumit Ganguly, 'Uncertain India' Current History, April 1996,
p.145-50.
- For a survey of the minority populations of India see Myron Weiner,
'India's Minorities: Who are hey? What do they Want', The Indian
Paradox: Essays in Indian Politics New Delhi, 1989, pp.39-75.
- Walter Andersen, 'India in 1995: Year of the Long Campaign' Asian
Survey, February 1996, pp.171-72.
- Harinder Baweja, 'Changing Face of Parliament', India Today,
15 July 1996, pp.25-36.
- Tamil initials for Dravida Munnetra Kazhagam or Dravidian Progressive
Federation. Although the DMK has support only in Tamil Nadu, 'Dravidian'
refers to the peoples of southern India whose anguages are unrelated
to the languages of northern Indian such as Hindi, which are more closely
related to the languages of Europe. The DMK also had its origins in
an anti-Brahmin movement in he region dating from the turn of the century,
which saw the high-caste Brahmins as part of the oppression of the Dravidian
peoples by the Aryan invaders from the north.
- East Asia Analytical Unit, India's Economy at the Midnight Hour:
Australia's India Strategy, 1994, p.20.
- John Adams, 'Reforming India's Economy in an Era of Global Change'
Current History, April 1996, p.151. East Asia Analytical Unit,
India's Economy at the Midnight Hour, pp.42-43.
- East Asia Analytical Unit, India's Economy at the Midnight Hour,
p.44.
- Economist Intelligence Unit, India Country Profile 1994-95.
- Department of Foreign Affairs and Trade, Country Economic Brief:
India, June 1996, p.20.
- Economist, 27 April 1996, p.22.
- For a survey of the problems and prospects for the Indian economy
see, East Asia Analytical Unit, India's Economy at the Midnight Hour.
- Far Eastern Economic Review, 12 September 1996, p.56.
- The Hindu, 5 November 1996, p.16.
- Economist, 27 April 1996, p.22.
- In 1994, 4.9 million people were employed by the public sector in
industry and mining, with 4.82 million employed in the same industries
in the private sector. Centre for Monitoring the Indian Economy, India's
Social Sectors, February 1996, p.233.
- Far Eastern Economic Review, 9 March 1996, pp.58-60.
- Economist Intelligence Unit, India Country Profile 1994-95,
p.18.
- Australian Financial Review, 24 September 1996, p.14.
- Asian Business, July 1996, p.35.
- United Nations Development Programme, Human Development Report
1995, pp.155-57. The UNDP Human Development Index rates India at
134 of the 174 countries listed.
- Economist, 27 April 1996, p.23.
- This figure omits the important indirect trade in diamonds between
Australia and India which is estimated at around $400 million. The trade
is routed through the international diamond exchange n the Netherlands.
- For a comprehensive discussion of Australia's relations with India
see East Asia Analytical Unit, India's Economy at the Midnight Hour:
Australia's India Strategy, 1994 and 'India', The Australia-Asia
Survey, 1996-97, Melbourne, 1996, pp.181-205.
AUSTRALIA'S MERCHANDISE TRADE WITH INDIA
A$'000 1991 1992 1993 1994 1995
Total exports 662,625 840,233 921,616 874,094 1,103,552
Total imports 258,793 321,230 406,892 476,066 553,370
Balance of merchandise trade 403,832 519,003 514,724 398,028 550,181
Principal Australian Exports to India (a)
054 Vegetables f.c.f. or simply prepared 21,174 17,253 27,276 47,205 13,744
263 Cotton 315 13,898 702 13,338 3,234
268 Wool & animal hair (incl wool tops) 65,232 88,966 89,416 98,803 135,217
284 Nickel ores conc & mattes 7,855 4,448 1,181 0 2,379
287 Ores & conc of base metal nes 0 16,389 15,481 18,286 26,640
288 Base metal waste & scrap nes 4,752 7,473 10,166 10,217 9,601
2* Crude materials (excl food & fuels) 4,318 4,553 6,162 7,515 7,392
321 Coal 2,732 394,089 439,737 486,363 587,894
333 Crude petroleum & oils 61,850 41,802 11,255 0 0
334 Refined petroleum & oils 59,573 3,415 21 48 136
3* Mineral fuels lubricants etc 3,554 1,901 647 246 2
522 Inorganic chemical elements oxides etc 3,501 1,098 7,505 5,046 7,754
575 Plastics in primary forms nes 6,309 7,904 11,676 7,581 18,668
5* Chemicals & related products 3,572 4,929 6,968 9,572 13,161
673 Flat-rolled iron steel not coated 1,274 3,933 183 21,977 28,048
67* Iron & Steel 1,687 1,732 1,187 5,028 11,806
682 Copper 1,245 12,284 24,862 21,766 48,767
685 Lead 8,991 8,555 9,467 16,931 17,035
686 Zinc 16,508 16,360 10,114 8,220 4,698
6* Manufactures classified by material 5,230 6,279 8,190 9,974 19,412
723 Civil engineering equipment 43 32,977 14,296 401 1,316
728 Other industry-specific machinery 712 962 1,689 2,938 41,145
744 Mechanical handling equipment 6 13,638 16,138 2,390 1,196
759 Computers & office mach parts etc 746 1,627 7,601 4,958 11,789
77* Electrical machinery & appliances 1,014 6,150 7,636 7,581 11,276
792 Aircraft and associated equipment 497 526 12,904 3,832 3,466
793 Ships boats & floating structures 0 12,025 10 1,085 423
7* Machinery & transport equipment 4,165 5,954 14,100 23,183 31,947
874 Measuring & checking equipment 2,021 5,825 3,745 2,681 3,602
882 Photo & cinematographic supplies 1,098 1,669 4, 773 4,066 1,827
8* Miscellaneous manufactured articles 2,238 2,638 5,142 11,334 9,529
988 Confidential items of trade 368,971 95, 849 150,008 13,487 24,704
Other 1,448 3,128 1,378 8,038 5,753
Principal Australian Imports from India (a)
036 Crustaceans etc f.c.f. dried 3,054 1,977 2,645 2,715 2,270
057 Fruit & nuts fresh or dried 18,092 15,750 22,991 25,198 30,681
071 Coffee & coffee substitutes 1,408 1,974 2,455 6,910 13,167
074 Tea & mate 7,353 8,595 10,337 8,963 8,376
0* Food & live animals 4,745 6,475 9,423 8,671 7,811
273 Stone sand & gravel 3,989 5,033 4,701 4,480 3,837
281 Iron ore & conc 11,470 12,290 12,133 8,532 10,054
292 Crude vegetable materials nes 2,035 2,730 2,881 3,809 4,622
2* Crude materials (excl food & fuels) 2,529 3,327 3,558 4,099 4,521
515 Organo-inorganic & heterocyclic comp 2,098 3,669 5,534 5,293 8,576
516 Organic chemicals nes 3,216 2,310 3,238 2,542 2,733
51* Organic chemicals 1,468 2,058 2,914 3,892 5,113
523 Metallic salts & peroxysalts 3,232 2,053 576 489 1,309
531 Synthetic organic colouring matter 3,004 4,218 6,038 5,103 5,019
5* Chemicals & related products 3,720 3,986 6,822 9,734 9,047
611 Leather 10,023 10,101 10,263 11,819 7,562
62* Rubber manufactures nes 2,326 3,387 2,630 3,264 5,692
651 Textile yarn 13,606 20,508 24,401 28,766 29,970
652 Cotton fabrics woven 9,519 16,367 21,059 27,333 24,738
654 Textile fabrics woven nes 9,410 11,545 11,092 8,082 6,770
658 Made-up textile articles nes 12,542 24,475 25,964 18,714 26,765
659 Floor coverings 8,334 11,246 15,088 19,556 19,506
661 Cement & construction materials 1,688 1,492 2,260 5,347 7,020
667 Pearls & precious stones 22,699 19,354 23,847 24,893 25,414
66* Non-metallic mineral manufactures 1,361 1,509 2,864 5,202 5,296
671 Pig iron granules & ferro-alloys 122 325 19 16 12,434
675 Flat-rolled products of alloy steel 274 666 4,302 6,617 5,071
676 Iron & steel bars rods etc 2,238 1,921 1,851 9,706 6,504
679 Tubes pipes etc of iron steel 3,428 2,104 871 1,825 1,971
67* Iron & steel 578 599 269 375 6,037
695 Hand or machine tools 2,079 1,888 2,551 3,865 3,158
699 Metal manufactures nes 5,781 9,545 10,501 13,194 14,896
69* Manufactures of metals nes 2,538 3,472 4,321 6,142 7,982
6* Manufactures classified by material 3,408 6,375 7,536 10,727 13,232
71* Power generating machinery 1,703 2,290 3,084 3,845 3,547
74* General industrial machinery 4,955 5,930 8,297 10,353 11,939
778 Electrical machinery nes 1,831 2,243 3,728 7,023 8,690
782 Goods and special purpose vehicles 411 1,862 1,308 6,314 4,125
78* Road vehicles 1,968 2,364 3,239 3,786 4,658
7* Machinery & transport equipment 2,466 3,229 4,012 6,511 7,298
831 Travel goods handbags etc 9,803 12,302 14,751 21,077 26,281
841 Males' clothing not knitted 9,254 12,849 14,557 20,324 32,331
842 Females' clothing not knitted 14,966 21,942 28,355 32,626 37,646
845 Clothing of textile fabrics nes 2,570 3,270 4,407 5,324 7,924
84* Clothing 3,374 4,846 5,580 7,277 8,847
851 Footwear 9,456 10,064 15,166 19,185 22,395
894 Sporting goods toys games etc 6,256 7,105 8,813 10,717 12,247
897 Jewellery 1,142 2,283 5,184 4,295 2,939
89* Miscellaneous manufactured articles nes 1,524 2,212 5,581 5,718 6,239
988 Confidential items of trade 1,705 407 8,735 210 2,006
Other 2,041 2,710 4,157 5,605 7,108
(a) Commodity groups do not include any items classified as confidential
* denotes 'Remainder of category'
Source: DFAT, Composition of Trade, Australia 1995
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