The past few years have seen great strides forward in India's foreign policy. To many of the country's friends, it was frustrating that for so long, it failed to express a world view and appeared to see the rest of the world through the distorting prism of its own long stand-off with Pakistan.

Under the present and previous prime ministers, however, things have changed. India has begun to live up to its position as one of the major players, with a rapidly growing economy and with the ability to influence the region and the world.

The diplomacy got under way with the dialogue between Jaswant Singh and Strobe Talbott, and continued to blossom as George W Bush [Images] took the place of Bill Clinton [Images] and Manmohan Singh [Images] succeeded Atal Bihari Vajpayee.

Central to the progress are much-improved relationships with Washington and Beijing [Images], as well as the developing dialogue with Islamabad. The nuclear co-operation agreement with the US in July was a landmark both in India-US relations and for the non-proliferation regime as a whole.

Meanwhile, India's status a rising economic power is now unchallenged.

It was unprecedented, he said, that two such large powers, so close together, should rise at the same time, and neither as the result of military might or military exploits.

This double phenomenon would, he said, shift the global centre of gravity closer to Asia: 'Global institutions and decision-making bodies will have to accommodate China and India far more than they currently do." But there was enough space, he said "for both societies to continue to grow, and simultaneously achieve their aspirations.'

Mr Narayanan underlined not only the country's strengths-- education, entrepreneurship, demographics--but also the resilience of the Indian system. 'In looking at the impressive growth posted by India (and China), the challenges posed by the management of a billion plus people on a daily basis often tend to be minimized.'

His candour about these challenges was impressive. Many of India's problems, he said, were 'of a nature that would have overwhelmed most other countries.' There were 'contradictions' in its development and growth strategies -- problems of distribution that were 'not unusual in a multi-layered society such as ours.'

There was almost no time 'when some part of India is not coping with natural disasters or addressing serious health problems.' At the same time, the country had faced insurgencies and separatist movements, as well as terrorism.

Against this background, a foreign policy had evolved in which India's role as a regional engine of economic growth was an important factor. 'The key focus in our external relations today is ensuring the stability and security of the region, comprising the arc of nations from the Persian Gulf to East Asia.'

More broadly, Mr Narayanan said it was the goal of Indian diplomacy to establish the best of ties with the US, Europe, Russia [Images], Japan [Images] and China.

These powers, he said, were interdependent: 'Their areas of agreement will increasingly be more than their areas of differences although the latter will not go away.'

It was made clear by other speakers that those differences certainly have not gone away. Kishore Mahbubani, formerly Singapore's top diplomat, bemoaned the collapse of the world order that had existed since 1945.

He said it was dying because nobody had been looking after it: US power had been the pillar holding it up, but this had been delegitimised by the decision to invade Iraq without United Nations authorisation.

'The Iraq war has done enormous damage,' he said. The US had also attacked the UN, 'which enshrines the principles on which the world order is based.'

Exclusive: M K Narayanan on the India-US relationship

Carl Bildt, the former Swedish prime minister, offered a gloomy view from a European perspective. The core strategic agendas of the US and Europe had been drifting apart, and the distinctive characteristic that each had brought to the world order was being undermined: US 'hard power' had been shown to be seriously limited because it had become bogged down in Iraq, and European "soft power" was weakened by setbacks to European unity including the rejection of the European Union constitution.

While some might argue that the failure of the European constitution was not such a bad thing, it is hard to escape the general pessimism that pervades a post-9/11 western world haunted by the threat from jihadist extremists, and with little hope of a favourable and speedy outcome in Iraq--but with distressingly little consensus on how to tackle these challenges as well as those of energy security, global warming and African poverty.

Therefore, Mr Narayanan's positive and outward-looking approach, emphasising that difficult problems could be overcome and that the rise of India and China could be benign, was extremely welcome.

Alexander Nicoll is Director of Defence Analysis at the London-based International Institute for Strategic Studies.