India-Australia Relations: From Periphery to Strategic Ties

Context

Defence Minister Rajnath Singh is slated to visit Australia in November as India and Australia are emerging as close strategic partners in the Indo-Pacific.

Background

• India and Australia established diplomatic relations in the pre-Independence period. It started with the opening of the Consulate General of India as a Trade Office in Sydney in 1941.
• Both the countries share the ethos and values of pluralism, liberal democracy, commitment to rule of law, Commonwealth traditions, international peace, development and security.
• The cooperation in defence, civil nuclear energy, education, sports and joint efforts to counter china constitute the principal pillars of our Strategic Partnership.
• India is Australia’s 4th largest trading partner with Australian merchandise & services exports to India valued at A$ 21.1 billion (2018) and two-way bi-lateral merchandise & services trade valued at A$29.1 billion (2018).

Bilateral Partnerships

• Political Cooperation
  • Both the countries are members of G-20, ASEAN Regional Forum (ARF), IORA (Indian Ocean Rim Association), Asia Pacific Partnership on Climate and Clean Development, East Asia Summit and the Commonwealth.
  • India and Australia support a multi-polar world order. Australia has continued to support India’s claim for permanent membership of the Security Council, the APEC (Asia Pacific Economic Cooperation) and the reforms of the United Nations.
  • Australia welcomed joining of India to MTCR (Missile Technology Control Regime)
  • Quadrilateral Security Dialogue on East Asia in which India-Australia play an important role to discuss ways to balance China’s growing ambitions in the Indo-Pacific region
  • Australia-India Leadership Dialogue involves active participation from Government, Business, Public Life, Civil Society and media for leadership development.
  • Australia India Youth Dialogue, which brings interaction between young leaders of both countries to enhance bilateral relationship
    
    
• Economic and Trade Relationship: The India-Australia economic relationship has grown significantly in recent years.
  • Bilateral trade: India’s trade in goods and services with Australia was approximately US$ 15.6 billion (A$20.7 bn) in 2016. India's exports to Australia stood approximately at US$4.6 billion (A$6.1 bn) in 2016 while India's import from Australia during the same period stood at US$11 billion (A$14.6 bn).
  • India’s main exports to Australia are Passenger Motor Vehicle & machinery, Pearls, Gems and Jewellery, medicaments and Refined Petroleum while our major imports are Coal, Non-monetary Gold, Copper, Wool, Fertilizers and education related services.
  • The two countries are currently discussing a Comprehensive Economic Cooperation Agreement (CECA) which will provide greater market access to exporters of goods and services and remove non-tariff barriers, encourage investment and address the border restrictions to trade. India is also seeking to address its adverse balance of trade in Goods and Services through specialized market access for its products.
  • India-Australia CEO Forum is a mechanism for business from both nations to engage directly on ways to build the bilateral trade and investment relationship. The Forum includes heads of Indian and Australian business. The Forum held its last meeting in New Delhi in 2017.
  • The Indian companies have made larger investments in Australia. Total Indian investment in Australia is near A$ 15.5 billion (up from A$600 million in 2006), while total Australian investment in India is over A$13.9 billion.
  • The importance of India for Australia can be gauged from the fact that in 2018 Australian Government commissioned an ‘India Economic Strategy’ cement India as a priority economic partner.
• Civil Nuclear Cooperation
  • To get unrestricted Uranium supply India signed a Civil Nuclear Cooperation Agreement with Australia in 2014 which came into force in 2015.
  • With the passage of passing the “Civil Nuclear Transfer to India Bill 2016” by Australian Parliament in 2016 Uranium mining companies in Australia can supply uranium to India for civil use.
  • Australia has about 40 per cent of the world's uranium reserves and exports nearly 7,000 tonnes of yellow cake annually. India is in need of regular Uranium supply to ensure energy security.
• Defence Cooperation
  • The defence cooperation extends to research, development and industry engagement.
  • Regular meetings at the level of the Defence Minister. Shri A K Antony, Former Defence Minister was the first Defence minister to visit Australia. Rajnath Singh, Defence Minister is visiting Australia in November as both countries are emerging close strategic partners in Indo-Pacific region to contain rising China.
  • Strengthening cooperation and exploring training avenues with Australia’s Maritime Border Command and conduct regular maritime exercises. Bothe navies have recently participated in each other’s naval exercises. AUSINDEX 2019 was held off the coast of Vishakhapatnam from April 2019.
• Agriculture, Science and Technology
  • A number of collaborative research projects in agricultural research, astronomy and astrophysics, environmental sciences, microelectronics, nanotechnology, renewable energy, marine sciences and earth systems sciences have been taken up.
  • An Australia-India Strategic Research Fund (AISRF) has been set up to fuel research and development
  • Each country contributed A$ 65 million over a five year period.
  • Australia is also cooperating in our Clean Ganga Project
• Resources and Energy Security
  • A Joint Working Group on Energy and Minerals was established in 1999 to expand bilateral relationship in the energy and resources sector.
  • During the visit of our Prime Minister Modi to Australia in November 2014, both countries agreed to cooperate on transfer of clean coal technology.
  • The resources and energy policy developments and reforms, including opportunities and challenges in mining, petroleum and gas, power, new and renewable energy, as well as challenges in skills, science and innovation and infrastructure have been discussed too.
  • Australia signed a framework agreement for Australia to join the International Solar Alliance, led by India and France in 2017.

• Education, Sports, Art and Culture
  • The Joint Working Group on Education has identified several key areas for co-operation, including collaborative research in education policy, student exchange programmes, capacity building in vocational education and distance learning in higher education.
  • Cooperation between Australian and Indian Universities and in particular, Joint PhD Programme to encourage research, promote school level cooperation under which an Australian team can come and study 5-7 States in India and promote Universities tie-ups.
  • Australia has also agreed to help in establishing a Sports University in India.
  • An MoU in the field of Tourism was signed between the two countries during the visit of PM Modi to Australia in November 2014, which is expected to promote and support the growth in the Tourism Industry.
  • Confluence, Festival of India in Australia, is first-of-its-kind Indian music and dance festival in Australia. The purpose of the festival is to showcase India’s rich and diverse culture. The festival is an initiative of Indian government supported by the Australian side. Confluence 4 will be held in November 2019.

Need for Strengthening Relations with Australia

• To counter China’s rising maritime influence, India needs Australia in Quad to balance China in the Indo-Pacific region. Both India and Australia view it as one of many plurilaterals to keep the Indo-Pacific region stable. Both the nations can therefore serve together as the net security provider in the region.
• To emerge as a political power in the region, India needs to strengthen its relations with Australia to work on common issues like transnational crime, terrorism, people smuggling, and illegal fishing.
• To make India world’s manufacturing Hub under ‘Make in India’ programme it can significantly use Australian expertise in the field of health, education and tourism.
• India needs Australia in the skill development of its largest demographic dividend in the world. Australia is well-equipped to assist India in knowledge-sharing, education and skill development. The two countries also have enormous potential to build on their people-to-people links and thus their soft power influence.
• India is the third largest source of immigrants to Australia and the second largest source for skilled professionals. This should give sufficient impetus to build a public understanding of each other and thereby improve public policy.
• There is a great scope for regional economic integration in the Indo-Pacific, one of the most flourishing trade zones in the world. The Regional Comprehensive Economic Partnership (RCEP) is a good platform for India to work towards the goal of regional economic development, since India is not yet a part of the Trans-Pacific Partnership (TPP-11 or CPTPP).
• Trilateral engagements with crucial nations like Indonesia and Japan and deeper engagement with regional groups like the Indian Ocean Rim Association and East Asia Summit will also strengthen the ties between India and Australia.

Challenges

Emerging China: The Indo-Pacific region is facing a range of traditional security challenges that relate to issues of trust in the form of China which has emerged as a regional power and has little faith in rule based order.

Security Challenges: There are also a growing number of non-traditional and trans-boundary security challenges, including terrorism, natural disasters and pandemics.

Trade Deficit: India faces unfavorable trade with Australia and despite opening talks for a comprehensive economic cooperation agreement in 2011, the agreement which would have significantly lowered the trade balance in favour of India, has remained elusive.

Violence against Indian Diaspora in Australia has become a new irritant in the relation as crimes against Indians have increased.

Way Forward

• The India-Australia relationship was often labeled as “one step forward, two steps back” is changing as Australia’s economic strategy for India recommended that India should be put in its top three export markets and be made the third largest destination in Asia for the country’s outward investment.
• The positive shift in relations since 2014 after a gap of 28 years should be continued and extended to all areas. India no longer sees Australia at the periphery of India’s vision but at the center of its thoughts.
• There is opportunity as well as challenge in the strengthening of India-Australia relationship. However, the three pillars in the form of economic relationship, geostrategic congruence and people-to-people ties should be strengthened to keep the momentum in the ties.

Practice Question:

There has been a drastic change in Indian foreign affairs towards viewing Australia from the periphery to the center of its vision. In the light of this statement explain the developments in India-Australia relations emerging as strategic partners in Indo-Pacific region?