INDIA - AUSTRALIA RELATIONS – INTERNATIONAL

News: The India-Australia relationship

 

What's in the news?

       After a visit to the cricket stadium in Ahmedabad with Prime Minister Narendra Modi Thursday, Australian Prime Minister Anthony Albanese tweeted about the fierce but friendly sporting rivalry between the two nations.

       "At the heart of this contest is genuine respect, reflecting the affection and friendship between our peoples...On the field, Australia and India are competing to be the best in the world. Off the field, we are co-operating to build a better world," Albanese, the first leader of his country to make a bilateral visit to India since Malcolm Turnbull in 2017. posted.

       The first in-person India-Australia Annual Summit was held recently.

 

India - Australia Relations:

Historical perspective:

       The India-Australia bilateral relationship has been underpinned by the shared values of pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement, and increasing high-level interaction.

       Several common traits, including strong, vibrant, secular, and multicultural democracies, a free press, an independent judicial system, and English language, serve as the foundation for closer co-operation and multifaceted interaction between the two countries.

 

Evolution:

       The end of the Cold War and beginning of India’s economic reforms in 1991 provided the impetus for the development of closer ties between the two nations.

       The ever-increasing numbers of Indian students travelling to Australia for higher education, and the growing tourism and sporting links, have played a significant role in strengthening bilateral relations.

       With the passage of time, ties evolved in the direction of a strategic relationship, alongside the existing economic engagement.

       In recent years, the relationship has charted a new trajectory of transformational growth.

       With greater convergence of views on issues such as international terrorism, and a shared commitment to a rules-based order in the Indo-Pacific region, the two democracies have taken their cooperation to plurilateral formats, including the Quad (with the United States and Japan).

 

Strategic ties:

       In September 2014, Australia’s Prime Minister Tony Abbott visited India, and in November that year, Modi became the first Indian Prime Minister to make an official visit to Australia after Rajiv Gandhi in 1986. He also became the first Indian PM to address a joint sitting of the Parliament of Australia.

       At the India-Australia Leader's Virtual Summit in June 2020, Modi and Prime Minister Scott Morrison elevated the bilateral relationship from the Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP).

       At the 2nd India-Australia Virtual Summit in March 2022, several key announcements were made, including on a Letter of Intent on Migration and Mobility Partnership Arrangement to foster the exchange of skills, and a Letter of Arrangement for Educational Qualifications Recognition to facilitate the mobility of students and professionals.

 

China factor:

       Ties between Australia and China were strained after Canberra in 2018 banned Chinese telecom firm Huawei from the 5G network. Later, it called for an inquiry into the origins of Covid-19, and slammed China’s human rights record in Xinjiang and Hong Kong. China responded by imposing trade barriers on Australian exports, and by cutting off all ministerial contact.

       India has been facing an aggressive Chinese military along the border. New Delhi and Canberra have been assessing the Chinese challenge since 2013.

 

Economic cooperation:

       The Economic Cooperation Trade Agreement (ECTA) - the first free trade agreement signed by India with a developed country in a decade entered into force in December 2022, and has resulted in an immediate reduction of duty to zero on 96% of Indian exports to Australia in value (that is 98% of the tariff lines) and zero duty on 85% of Australia’s exports (in value) to India.

       Bilateral trade was US$ 27.5 billion in 2021. With ECTA, there is potential for it to reach around US$ 50 billion in five years.

 

People-to-people ties:

       India is one of the top sources of skilled immigrants to Australia. As per the 2021 Census, around 9.76 lakh people in Australia reported their ancestry as Indian origin, making them the second largest group of overseas-born residents in Australia.

       To celebrate India@75, the Australian government illuminated more than 40 buildings across the country, and Prime Minister Albanese issued a personal video message.

 

Education:

       The Mechanism for Mutual Recognition of Educational Qualifications (MREQ) was signed on March 2 this year.

       This will facilitate mobility of students between India and Australia. Deakin University and University of Wollongong are planning to open campuses in India.

       More than 1 lakh Indian students are pursuing higher education degrees in Australian universities, making Indian students the second largest cohort of foreign students in Australia.

 

Defence cooperation:

       The 2+2 Ministerial Dialogue was held in September 2021, and the Deputy Prime Minister and Defence Minister of Australia visited in June 2022.

       The Mutual Logistics Support Agreement (MLSA) was concluded during the Virtual Summit in June 2020, and the two militaries held several joint exercises in 2022.

       Australia will host military operations with India, Japan, and the US in the “Malabar” exercises off the coast of Perth in August, and has invited India to join the Talisman Sabre exercises later this year.

 

Energy security:

       Australia is a natural partner for India in the energy sector.

       Four products such as coal, non-monetary gold, copper ores & concentrates, and petroleum accounted for over 80 percent of India’s imports from Australia, thereby having immense potential on India's energy security.

 

Clean energy:

       The countries signed a Letter of Intent on New and Renewable Energy in February 2022 which provides for cooperation towards bringing down the cost of renewable energy technologies, especially ultra low-cost solar and clean hydrogen.

       During the Virtual Summit in March 2022, India announced matching funds of AUD 10 million for Pacific Island Countries under Infrastructure for Resilient Island States (IRIS) and of AUD 10 million for Pacific Island Countries under International Solar Alliance (ISA).

 

Rising QUAD:

       Both India and Australia are members of QUAD (India, US, Australia, Japan).

       Australia-India Indo-Pacific Oceans Initiative Partnership (AIIPOIP) helps shape maritime cooperation in the Indo-Pacific to support an open, inclusive, resilient, prosperous and rules-based maritime order.

 

Issues in India-Australia relations:

Economic relations:

       The trade between the two countries has been at a modest $31 billion, largely composed of resources like coal and other minerals.

       The problems faced by the Adani Group to begin work on a coal mining project in Queensland did not go down too well with investors from India.

Visa issues:

       India’s desire for visa reforms in Australia, which would permit more Indian workers to seek employment in Australia, remains unmet.

       India wants greater free movement and relaxed visa norms for its IT professionals, on which Australia is reluctant.

Nuclear power issue:

       Building consensus on non-nuclear proliferation and disarmament has been a major hurdle given India’s status as a nuclear power.

Bilateral defence cooperation:

       Although security has received a lot of significance in the relationship, in practice Australia-India defence cooperation remains relatively undeveloped.

       There are a considerable number of defence and security dialogues between the two countries, but none has been translated into more substantive cooperation.

Attacks on Indians:

       Increasing Racist attacks on Indians in Australia has been a major issue.

       The relationship was further strained over the attacks on Indian students studying in Melbourne, and the resulting media coverage caused serious damage to Australia’s standing in India.

Chinese influence:

       China is Australia's largest trading partner in terms of both imports and exports which leads to increased chinese influence in Australia's foreign policy.

 

WAY FORWARD:

Investment Protection:

       India’s overly defensive stand on investment protection under international law is a consequence of several international claims under BITs.

       India should come out of its shell and accept investment protection as part of its broader economic commitments under international law. This will enable India to realize the full potential of these CECAs.

Improving Competitiveness:

       While the Government of India has successfully negotiated an excellent trade deal for businesses, it is important to realise that accessing the Australian market wouldn’t be a cakewalk given the fact that Australia has currently 16 FTAs under operation.

       We would still have to work on improving our competitiveness, as in most trade sectors, India would be competing with the likes of China, ASEAN, Chile, Japan, Korea and New Zealand, which have already-functional FTAs with Australia.

APEC Partnership:

       Time is also opportune for India’s Asia-Pacific Economic Cooperation (APEC) membership, the goal of a free and open Indo-Pacific is incomplete without the presence of the world's fastest growing major economy in APEC.

       Also, with the deepening of Australia India bilateral ties, Australia can explore initiating a support lobby within APEC for India’s membership.