So deep is the sense of betrayal by South Africa -- a country India has unceasingly supported in its fight against apartheid -- that prime minister Atal Behari Vajpayee reportedly felt compelled to tell Mandela at a banquet later in the evening on Wednesday that his statement was "unwarranted and uncalled for". Sources close to the Indian team said this kind of reference to Kashmir had never been made in the past.

In fact, Vajpayee's speech scheduled for Thursday has beenredrafted to press home the point. In a sharp, but indirect, rejection of the Mandela statement on Kashmir, Vajpayee emphasised: "Let me say this loud and clear, there is no place for any third party involvement in this process, howsoever well-intentioned. The state of Jammu & Kashmir is, and will remain, an integral part of India. The real problem there is one of cross-border terrorism."

This strong assertion was an addition to the speech after the full text of Mandela's address was made available to the Indian delegation. The earlier text merely stressed the need for bilateral talks under the Shimla accord to address problems relating to Pakistan. The prime minister made references to the cordial meetings he had in Colombo with Pakistan prime minister Nawaz Sharif, and specifically mentioned that he would not air bilateral problems in the NAM forum.

But the Mandela observations apparently changed all that. Diplomatic observers feel that India's relationship with South Africa was seen as special in Indiaprimarily because South Africa gave us Gandhi and satyagraha, but the South Africans obviously don't share the emotional element in this relationship as strongly as the Indians do. The African National Congress, forged in the bushes of Tanzania as a liberation movement, has been appreciative of India's support in the past against apartheid, but now feels that it move on to the future. In fact, Wednesday's address by Mandela made no reference whatsoever to Gandhi, though his speech was peppered with the kind of understanding of the problems of the poor that one would expect of the Mahatma.

What this means is that in future India-South Africa relations will be guided like that with any other. There will be less of an emotional content to the relationship, and diplomatic ties will be characterised by the pursuit of common interests and beneficial alliances. Otherwise, the two will go their separate ways.

While this is the political fallout of the Mandela references to Kashmir, the economic fallout isunlikely to be significant -- except, perhaps, for a slowing down of the South African involvement in the Indian Ocean Rim Association of Regional Cooperation (IOR-ARC). With South Africa turning lukewarm, and with Australia positively hostile to India after the Pokharan blasts, the initiative for IOR-ARC will have to come from the smaller Rim countries like Mauritius, Oman, Mozambique, Madagascar and Tanzania in Africa and Singapore and Malaysia on the south-east Asian side.

Since 1993, India and South Africa have seen a 10-fold growth in two-way trade, which currently stands at $ 800 million (around Rs 3,400 crore). The main items of India's exports are textiles, garments, leather and leather products, pharmaceuticals, machinery and machine tools and jewellery. India's imports from South Africa include base metals and products, chemicals, wood pulp, paper and fertilisers.

After the lifting of economic sanctions, Indian businessmen have responded to the opportunities by setting up joint ventures andtaking over small companies. The Vijay Mallya's UB group has, for example, invested $20 million in a South African beer company and $7 million in a tourism project. The Delhi-based Shriram Industrial Enterprises has invested $7 million in a car air-conditioners unit.

Defence cooperation is also expected to get a leg up. There is no reason to think that India and South Africa are going to give up beneficial defence and economic ties just because of the Mandela flap. But one thing is certain: the scales have fallen from Indian eyes when it comes to dealing with South Africa.