MARK COLVIN: Under the circumstances it could be time to pay India a lot more attention.

Dr Shashi Tharoor is an Indian Member of Parliament and former senior UN official. His latest book is ‘Pax Indica: India and the World of the 21st Century’.

He spoke to me from Melbourne, where he was speaking at the Institute of Public Administration Australia 2012 International Congress.

SHASHI THAROOR: Australia is an important country for us. We’re very glad that Australia’s agreed to start selling uranium to India for one thing. But there are good trade relations which can be strengthened and there’s tremendous potential for mutual investment.

In fact Indian IT companies have discovered Australia. Indian mining companies are coming into Australia and looking closer and I suspect there are many other areas waiting to be discovered in Australia that Indian businesses would benefit from.

In turn, Australia could well look at India as an important market as well as an important source of the kind of intellectual contributions that perhaps Australian companies don’t have enough people here to make.

MARK COLVIN: Are we being too slow as a government?

SHASHI THAROOR: No I wouldn’t say that. No I think that there’ve been some setbacks; this whole business a couple of years ago about Indian students being assaulted in Australia and the resultant media hysteria whipped up in my country by a frankly irresponsible tabloid journalism of our television channels.

That did contribute to a bit of a setback and I think Australia has done well to recoup from that damage which it clearly has and I think now we need to look forward and move positively.

I mean don’t forget there are lots of positives in the relationship.

MARK COLVIN: And is it now possible to be friends with China and friends with India and friends with the United States in a way that it wasn’t 20 years ago?

SHASHI THAROOR: Yes I think it is. I think we have moved away from the binary world of the Cold War when you really had to choose between one super power and another.

One of the things that’s so different about this era, as opposed to that one, is the extent of the interpenetration between the two principal powers of the day; the Chinese have got $3-trillion or something of American treasury bonds at the moment.

The American economy could in fact literally collapse if the Chinese wanted to pull them all out in one fell swoop.

The Americans in turn are hugely invested in China. In fact a large percentage of China’s economic growth is attributable to American investment and their country. So this level of cooperation, interpenetration, now educational exchange, cultural exchange, business exchange that’s been following I think gives us a very different world.

I think if the Chinese and the Americans can get along with each other despite the fact they suggest rivalry there’s no reason why we can’t get along with both of them.

MARK COLVIN: And people talk about a sort of demographic ceiling that China’s going to hit well within the next 20 years and they suggest that India is about to take off doubly so at about that time.

Do you agree with that?

SHASHI THAROOR: In part, yes. I mean there’s no question the Chinese one child policy is now turning out to bite them on the ankle because you’ve got one child essentially struggling to support four grandparents and this is going to be a problem. Plus China is ageing. They will soon be one of the oldest countries in the world because they won’t have produced enough young children to help bear the burden as well as to help keep the economy humming.

Whereas India where 65 per cent of the population is under 35, where 540-million young people who are under 25, India could essentially be the workhorse for the world, could have a dynamic, productive, youthful workforce for the next 30 years while the rest of the world is ageing.

The big ‘but’ is we have to get it right in terms of educating and training these young people because if we don’t do that our demographic dividend could turn out to be a demographic disaster. These same young people, if they don’t have an education or training, don’t have the skill sets to take on jobs in the new economy, don’t have the ability to take advantage of their youthful energies and work for the world, they could instead pick up the gun and we already have Maoist insurrections in some of our districts which could get completely out of control.

So it’s only partly true because we still have to get the policies right.

MARK COLVIN: But India is already starting to ramp up its navy, for example.

SHASHI THAROOR: Yes.

MARK COLVIN: For a country like Australia, does that mean there will be much more projection of Indian power into our region?

SHASHI THAROOR: Well we already have naval exercises with the Australian navy and I think that given the extraordinary amount of coastline we have it’s natural we should have a much larger navy than we have right now because we have a legitimate interest in keeping sea lanes of communication open across the Bay of Bengal towards the east, that part of the Indian Ocean, and across the Arabian Sea towards the west, the western part of the Indian Ocean.

And India, to be a naval power in the Indian Ocean is almost axiomatic. But we also have never expressed any belligerent interests in that. We want to keep communications open. We want to see commerce flowing across them. We have been ready to respond to humanitarian disasters; the Indian navy was amongst the first and the quickest to come both to Indonesia after the tsunami and to Burma after Cyclone Nargis.

So, it’s that, if we have that capacity we are very happy to use it to help our neighbours when needed.

MARK COLVIN: Shashi Tharoor whose book is Pax Indica. That’s part of a longer interview which will be on this week’s edition of Friday Late. That’s on Radio National after the 10 o’clock news tonight.