India Australia relations background

Diplomatic Ties

India established a Trade Office in Sydney in 1941. After independence, in 1950, Robert Menzies became the first Australian Prime Minister to visit India. He had earlier supported India’s admission into the Commonwealth as a republic.

Growing people-to-people ties

• There are many citizens in Australia with Indian origins. Out of the country’s 24 million people, about half a million are of Indian origin.
• The fastest growing language in Australia is Punjabi and the fastest growing religion is Hinduism.
• As of 2017, more than 60000 students from India are studying in Australia.
• More than 2 lakh Indians visit Australia every year.

India – Australia Economic Relations

Major Australian Imports to India

• Coal
• Services (chiefly education)
• Gold
• Copper ores and concentrates
• Vegetables for consumption by consumers

Major Indian Exports to Australia

• Refined petroleum
• Services (such as outsourcing)
• Pearls
• Gems
• Jewellry
• Medicaments

Both countries have established a Strategic Research Fund for $100 million.

Uranium Import

India – Australia Military Relations

A joint naval exercise called AUSINDEX is carried out between India and Australia every year.
In 2007, Australia was a participant in the Malabar Exercise which is an annual trilateral naval exercise between India, USA and Japan.

Indian diaspora in Australia

India Australia Prospects and Future Challenges

• Energy sector – Australia is poised to overtake Qatar as the largest exporter of Liquified Natural Gas (LNG). India can diversify the sourcing of its LNG supply with Australia (reducing dependency on West Asian countries) and reap huge benefits from a long-term relationship. This is in addition to the already-blooming relations in the nuclear fuel supply domain.
• Comprehensive Economic Cooperation Agreement (CECA) – Negotiations for a CECA started in 2001. If this is materialised, India will have better access to the world’s 12th largest economy. Half of India’s exports to Australia face stiff tariffs, and if the CECA is made, Indian businesses would be in the same footing as other FTA partners of Australia such as China. This would also improve investments from Australia, which has the third-largest pool of investment funds under management in the world.
• Why CECA is in a deadlock
  • India is opposed to greater access for Australian businesses in the sector of dairy and agricultural markets in the interests of its small and marginal farmers and people working in the dairy industry.
  • India wants greater free movement and relaxed visa norms for its IT professionals, which Australia is reluctant to agree to citing local unemployment as the reason.
  • India wants Australia to soften its high non-trade barriers for Indian products.
  • India is reluctant to open up its doors for legal services from Australia.
  • There is also no concrete agreement on greater market access for Australia’s wine, meat, auto components and financial services industries.
  • Both countries also differ in their preference towards Rules of Origin (ROO) in fixing the tariff lines for goods.
• India can seek Australia’s expertise in the food processing industry.
• Australia has good experience in paddy cultivation in relatively arid lands. India can learn much from their technology and experience in this regard.
• Mining technology and clean coal technology are two other areas where India can collaborate with Australia.
• Another domain in which cooperation can be fostered is solar energy. Australia has joined the International Solar Alliance, which is sponsored by India and France.

India - AustraliaVirtual Summit 2020

• India has for long been preoccupied with the perennial challenges in the neighbourhood and the ties with the great powers.
• It has, in the past, missed out on the opportunities for productive partnerships with the middle powers.
• Few countries have been underestimated in India such as Australia.
• The recent summit thus is an effort to plug that gap in India’s diplomatic tradition.

• With a GDP of more than US$1.4 trillion, Australia is the 13th largest economy in the world.
• This is followed closely behind Russia that stands at $1.6 trillion.
• Australia is rich in natural resources that India’s growing economy needs.
• It also has huge reservoirs of strength in higher education, scientific and technological research.
• In the global diplomatic arena, Australia has a significant place than is believed.
• Its armed forces, hardened by international combat, are widely respected.
• Canberra’s intelligence establishment is valued in many parts of the world.
• Australia has deep economic, political and security connections with the ASEAN.
• It also has a strategic partnership with one of the leading non-aligned nations, Indonesia.
• Canberra has a little “sphere of influence” of its own in the South Pacific (now under threat from Chinese penetration).

• All these Australian strengths should be of interest and value to India.
• India’s first Prime Minister, Jawaharlal Nehru, believed Australia is a natural part of Asia.
• He invited Australia to participate in the Asian Relations Conference in Delhi in 1947, a few months before independence.
• But the rest of the 20th century did not see much cooperation between the two countries.

• India's nuclear tests in 1998 have been significant in changing the course of relationship with Australia.
• The following political differences between Delhi and Canberra complicated the possibilities that the end of the Cold War opened up.
• But since 2000, Canberra has taken consistent political initiative to advance ties with India.
• It has worked on resolving the nuclear difference and expanding the template of engagement.
• Notably, there was a gap of nearly three decades between Rajiv Gandhi’s visit to Australia in 1986 and Modi’s trip in 2014.

• It was exactly in that gap of nearly three decades that China transformed its relationship with Australia.
• Delhi’s temptation to judge nations on the basis of their alignments with other powers stands in contrast to Beijing.
• Beijing always seems to put interests above ideology.
• China promotes interdependence with a targeted middle power.
• It then turns it into political influence and tries to weaken its alignment with the rival powers.
• However, now, India-Australia ties are being renewed with India's new political will to liberate its relations from ideological prejudice.

• The Indian diaspora, now estimated at nearly 7,00,000, is the fastest growing in Australia.
• This has become an unexpected positive factor in the bilateral relations.
• Besides, there is common membership of many groupings like the G-20, East Asia Summit, IORA, and the Quad.
• This has increased the possibilities for diplomatic cooperation on regional and global issues.
• The current downturn in the global economy limits the immediate possibilities for realising the full potential of commercial relations.
• But there are a host of emerging issues.
• Some of them include reforming the WHO, 5G technology, strengthening the international solar alliance, building resilience against climate change and disasters.
• The geopolitical events in the Indo-Pacific have opened up a massive space for consequential security cooperation between the two countries.

• Over the last few years, defence engagement between the two countries has also grown.

What is the way forward?

• With growing Chinese assertiveness and the uncertain US political trajectory, Delhi and Canberra need new ways of securing their interests.
• The scale of the security challenge in the Indo-Pacific demands more than incremental steps.
• Security establishments must develop strategic coordination in the various sub-regions of the Indo-Pacific littoral.
• Lying at the heart of the Indo-Pacific, Eastern Indian Ocean connects the two oceans, where the two countries can initiate a full range of joint activities.
• These might include maritime domain awareness, development of strategically located islands and marine scientific research.
• The sea lines of communication between the Indian and Pacific oceans run through the Indonesian archipelago.
• There is also a shared political commitment to the Indo-Pacific idea between Delhi, Jakarta and Canberra.
• Modi and Morrison must thus seek trilateral maritime and naval cooperation with Indonesia.
• Besides Indonesia, three other powers present themselves as natural partners for India and Australia - Japan, France and Britain.
• Enhanced trilateral engagements at diplomatic and practical maritime level with each of these will go a long way in securing geopolitical interests.
• Notably, Britain wants to return to the oriental seas.
• In the east, Britain continues to lead the so-called Five Power Defence Arrangement (FDPA) set up back in 1971, after Britain pulled back most of its forces from the East of Suez.
• The FPDA brings together the armed forces of the UK, Malaysia, Singapore, Australia and New Zealand.
• Modi and Morrison must explore the possibilities for engagement between India and the FPDA.
• In all, building a series of overlapping bilateral and minilateral platforms for regional security cooperation by Delhi and Canberra is what is called for now.