THE mood was upbeat when more than 50 parliamentarians, diplomats, government officials, academics and business figures met in Delhi this month to talk about relations between Australia and India.
Foreign policy experts at the Australia-India Roundtable, as the annual meeting is known, said ties between the two Indian Ocean powers were "poised at an historic moment" amid new levels of mutual trust. A top Indian strategic analyst said there was real momentum in the India-Australia relationship for "the first time since the independence of India" more than 60 years ago.
The Labor government's decision to drop its ban on uranium exports to India has made a big difference. The broad response to violence and other problems facing Indian students in Australia has also gone down well in Delhi.
But if political ties are on the up, the economic relationship between Australia and India seems to have lost some of its zing.
A few years ago, our trade with India was growing even more quickly than trade with China. But things have changed. New government figures show Australia's merchandise exports to India fell by 17 per cent last financial year. Two-way merchandise trade was down 12.5 per cent. Back in 2008-09, India surged ahead of South Korea as Australia's third-biggest export market but has now dropped back to a distant fourth.
The details of Australian trade with India expose some considerable shortcomings in the economic relationship. Firstly, there is a huge trade imbalance - last year Australia exported $15 billion worth of goods and services to India but imported just $3.2 billion from India. Australia accounts for just 0.7 per cent of India's exports, making us its 33rd most important export market.
In other words, when it comes to trade dollars, India is far more important to us than we are to them. Secondly, the trade relationship is very narrowly based. Just two Australian commodities - coal and gold - made up half of all trade between the two countries last financial year.
The trade imbalance is reversed when it comes to investment. The involvement of Indian companies in several big mining projects, especially in Queensland, lifted total Indian investment in Australia to $11 billion last financial year, according to the Department of Foreign Affairs and Trade.
There is recognition in India that Australia has a big role to play in meeting India's enormous demand for energy. A recent report by Melbourne University's Australia-India Institute, Beyond the Lost Decade, said: "Queensland has emerged as a key location for India's energy security needs."
But Australian investments in India are puny by comparison, totalling just $4.3 billion last year. That's a fraction of Australian investments in its other big Asian trading partners - China (total investments of $17 billion), Japan ($35 billion) and South Korea ($13 billion).
One reason for this is restrictions on investments in many sectors of the Indian economy.
Energy Minister Martin Ferguson, addressing the Australia-India Roundtable this month, was blunt - there are "frustrations in the relationship" and the plans of some Australian companies to make big investments in the Indian mining sector are being thwarted.
"This is a new phase in our engagement and energy security has jumped up as one of the priority issues," he said. "Australia is a strong economy because we've welcomed foreign investment. We've got companies that are frustrated in their desire to invest in India, so we've all got our challenges."
Big mining companies such as Rio Tinto (which has a diamond and an iron ore project in India) and BHP Billiton have been waiting more than a decade for the mining sector to be opened up. Even so, the story of Australia's investments in India is far from impressive.
Some of our biggest companies have made promising investments in India only to retreat at great cost to them, and to Australia's reputation as an investor.
Telstra was among the first telcos to win mobile service licences in India, in collaboration with a local company. Modi-Telstra, as the joint venture was known, was the first company in India to provide mobile telephony. But Telstra sold its stake and left India not long before changes freed up the mobile market. That decision meant Telstra missed out on India's mobile phone boom - the country now has more than 800 million mobile phone subscribers, having added more than 500 million in the past five years alone.
ANZ has a similar story. It bought India's iconic Grindlays Bank in 1984 and with it a valuable stake in the Indian financial sector. But in 2000, ANZ sold its Grindlays subsidiary to Standard Chartered in a move that was interpreted by many Indians as a no-confidence vote in the country's economic prospects. The Indian banking sector has subsequently experienced strong growth and Standard Chartered is now considered one of India's most successful foreign banks.
The Beyond the Lost Decade report says the "departure of Telstra and ANZ in quick succession left many business analysts in India with the impression Australian companies were only in it for the short haul".
Patterns of foreign investment can be a telling indicator. While trade is a relatively simple relationship that does not require a lot from either party, investment is a much more enduring relationship that requires a high level of trust.
Australians are still much more comfortable investing in the US and Europe than Asia. Even though India is a bigger export market for Australia than the US, the value of Australian investments in America is 100 times the value of investments in India.
The Australian government has managed to put political relations on a much firmer footing. Now businesses and investors need to step up.