India and Australia have several commonalities which serve as a foundation for closer cooperation and multifaceted interaction, on lines similar to what India has developed with other Western countries. Both are strong, vibrant, secular and multicultural democracies.
The English language, cricket and large number of Indian students going to Australia for education are significant elements in the bilateral relations.
The establishment of diplomatic relations between them dates back to the Pre-independence era. It started with the opening of the Consulate General of India as a Trade Office in Sydney in 1941.
After the Indian economic reforms, the relationship has grown in strength and expanded to areas such as trade, energy and mining, science & technology, information technology and defence.
Areas of Cooperation
- There are regular visits both at ministerial level and also head of government or head of state level from
Australian side. In 2009, the relationship was upgraded to the level of an ‘Strategic Partnership’.
- India and Australia co-operate in various multilateral fora. Australia supports India’s candidature in an expanded UN Security Council.
- Both India and Australia are members of the G-20, Commonwealth, IORA, ASEAN Regional Forum, Asia Pacific Partnership on Climate and Clean Development, and have participated in the East Asia Summits.
- Australia is an important player in APEC and supports India’s membership of the organisation. In 2008, Australia became an Observer in SAARC.
- The Mutual Legal Assistance Treaty (MLAT) and the Extradition Treaty between India and Australia were signed in June 2008.
- After a string of ministerial visits, finally PM Narendra Modi visited Australia after a period of 28 years on the eve of ‘G20 Leaders’ Summit in November 2014. It must be observed that the relations are improving, with Australia taking relations with India as a ‘foreign policy priority’. India and Australia have also held their first ever ‘2+2 Dialogue’ between the foreign secretaries and defence secretaries of both the nations in the year 2017.
- Other existing MoUs are cooperation in sports, field of water resources management, technical vocational education and training, field of tourism, combating international terrorism and transnational organized crime, field of Health and Medicine, field of Environment, Climate and Wildlife, Civil Aviation Security.
- As part of its efforts to develop strong economic relationship with India, the Australian Government commissioned the India Economic Strategy to 2035 to define a pathway for Australia to unlock opportunities offered by Indian Economic growth (This paper was released in 2018)
- India-Australia Joint Ministerial Commission (JMC) was established in 1989 to enable interaction at a government and business level on a range of trade and investment related issues
- Bilateral Trade
- India is the 8th largest trade partner of Australia with trade in goods and services at A$ 26.24 billion representing 3% share of the total Australian trade in FY 2019-20, with exports at A$ 7.59 billion and imports at A$ 18.65 billion
- India’s main exports to Australia are Refined petroleum, Medicaments (incl. veterinary), Pearls & gems, Jewellery, Made-up textile articles, Women’s clothing , Other textile clothing, Manufactures of base metal
- While India’s major imports are Coal, Confidential items of trade, Copper ores & concentrates, Natural gas, Non-ferrous waste & scrap, ferrous waste & scrap and education related services
- Education is Australia’s largest service export to India, valued at $6 billion and accounting for around 88 per cent of the total in 2020
- 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 (It was established in 2011 and revitalised in November 2014).
- The Forum includes heads of Indian and Australian business from a broad range of sectors
- Treasury-NITI Ayog Economic Policy Dialogue
- A two–member delegation led by CEO of NITI Aayog, visited Australia in 2019, for first of its kind dialogue
- Further, To support more Australian and Indian business partnerships, the Australian Government has launched the Australia India Business Exchange (AIBX) program.
- AIBX provides a range of services to support Australian businesses to enter and establish in India, from industry specific insights to guidance on doing business with India and entering India’s online retail market.
- The two countries are currently discussing a Comprehensive Economic Cooperation Agreement
(CECA) which will provide greater market access to Indian exporters of goods and services.
- It must be observed that the relations should move forward positively as Australia is neither a premier export destination nor an import source from India’s point of view.
- The strength of the Indian community in Australia is nearly 4,96,000 and they contribute to the Australian
economy in their role as teachers, doctors, accountants, engineers and researchers. India is the third largest source of immigrants for Australia.
- Australia’s Indian population will help sustain India’s economic and political interests in the foreseeable
- The relationship between the two countries is based on the three ‘C’s ‘ of Cricket, Curry and the Commonwealth.
- The decision of the Australian Government to supply uranium to India was taken in 2012.
- Civil Nuclear Cooperation Agreement has been signed between the two countries when Prime Minister of Australia visited India in September 2014.
- The agreement came into force in 2015 and provides the framework for substantial new trade in energy between Australia and India.
- In this pursuance, The Australian Parliament passed the “Civil Nuclear Transfer to India Bill 2016” in 2016 which ensures that Uranium mining companies in Australia may fulfil contracts to supply Australian uranium to India for civil use with confidence that exports would not be hindered by domestic legal action, challenging the consistency of the safeguards applied by the IAEA in India and Australia’s international non-proliferation obligations
- Australia and India have a positive defence relationship, underpinned by the 2006 Memorandum on Defence Cooperation and the 2009 Joint Declaration on Security Cooperation.
- Australia participated in the Indian-hosted Exercise MILAN 2014, which included the opportunity to cooperate with India and other regional Navies.
- In 2014, both sides concluded Framework for Security Cooperation. The Framework lays down an action plan ranging from dialogue at the PM level to expanding defence dialogues and joint exercises and possible joint defence production besides joint counter-terror partnership.
- In 2015, India-Australia committed to hold first formal bilateral naval exercise AUSINDEX biennially, and the next iteration took place in Australia in 2017.
- Exercise Pitch Black is a biennial warfare exercise hosted by the Royal Australian Air Force (RAAF).
- Both nations also cooperate alongside AUSTRAHIND (Special Forces of Army Exercise).
Agriculture, Science and Technology
- An Australia-lndia Strategic Research Fund (AISRF) was set up where a number of collaborative research projects were identified.
- The areas covered under the Fund are agricultural research, astronomy and astrophysics, environmental sciences, microelectronics, nanotechnology, renewable energy, marine sciences and earth systems sciences.
- The two governments have committed over $100 million to the AISRF. Joint Committees on S&T and Biotechnology have been established to administer the Fund. The Australian side will cooperate in our Clean Ganga Project.
Energy and Mineral Resources
- A Joint Working Group on Energy and Minerals was established in 1999 to expand our relationship in the
energy and resources sector. Both sides will cooperate on clean coal technology.
- Australian universities are working closely with Indian School of Mines, Dhanbad for its upgradation.
- Indian companies like Adani enterprises, GVK power and infrastructure, NMDC are exploring opportunities for mineral exploration in Australia.
- In 2017, Australia signed a framework agreement for to join the International Solar Alliance, led by the Governments of India and France
- The Australia-India Energy Dialogue is the primary forum to discuss bilateral engagement on energy and resources.
- There are 4 working groups established to support the Energy Dialogue:
- Renewable Energy and Smart Grids
- Power and Energy Efficiency
- Coal and Mines
- Oil and Gas
- There are 4 working groups established to support the Energy Dialogue:
- At the recent QUAD summit, both sides agreed to go forward with a low emissions technology partnership, a partnership that will focus on hydrogen development, ultra-low cost solar programs, to support India’s energy transition.
Education, Sports, Art & Culture
- The Joint Working Group on Education between the two countries identified several key areas for cooperation.
- The number of Indian students studying in Australia as of 2017 is around 78,000 with 50% in higher education and rest in vocational and educational training.
- There is increasing cooperation between Australian and Indian Universities in some areas including Joint Ph.D. Programme to encourage research, universities tie-ups.
- India’s challenge of training youth to reap demographic dividend presents an opportunity for Australia as a destination for Indian students. Identifying this opportunity, the Australian government’s India Economic Strategy Report identifies education as the “flagship sector,” owing to Australian expertise in the field.
- Recently, a sports partnership was launched between the two countries in Mumbai.
- Repatriation of Indian Cultural Artefacts
- A number of artefacts have been successfully repatriated to India in recent years.
- They include Bronze Idol of Nataraja from Art Gallery of South Australia (AGSA) (2019), Nagaraja stone sculpture (2020), two Dwarpala stone sculptures (2020).
Significance of Australia to India
- India’s Act East Policy: India’s relations with the countries under the purview of its Act East Policy (AEP) have broadened to encompass security, strategic , political and counter-terrorism realms, as well as defence collaboration. Australia is one of the key strategic players in India’s AEP with ASEAN remaining at its heart.
- Membership to Multilateral Forums: Australia is a member of MTCR, Australia Group, Wassenaar Arrangement and NSG. India is keen to become a member of the NSG, apart from being stakeholders in the Wassenaar Agreement (India is a member) and Australia Group, to expand its nuclear power generation and also enter the export market. Therefore, support of Australia is vital to get entry into these groupings. India needs Australia’s support in multilateral for a, especially UNSC and APEC.
- Uranium: The civil nuclear cooperation agreement entered into force will enable the export of uranium to India.
- Indian Ocean Region: Being Indian Ocean states, the big strategic challenges of the future are likely to be maritime in nature India needs Australia for maintenance of peace and stability in the region.
- Coordinated development of the island territories in the Bay of Bengal and the eastern Indian Ocean by both the countries, sharing of facilities and information can vastly improve the naval reach of India and Australia as well as contribute to the construction of a stable maritime order in the Bay of Bengal and the eastern Indian Ocean.
- This convergence in views led to India’s participation in the first formal official-level discussions under the regional coalition ‘Quad’ in November 2017.
- Assertiveness of China: India, Japan and Australia are on the “same page” over increasing assertiveness of China in the disputed South China Sea. Given the economic and strategic importance of South China Sea
- India and Australia have voiced for peace and stability in the region, respect for freedom of navigation and international laws (UNCLOS).
- Energy: India needs Australia as a vital partner in meeting growing energy needs and in developing low emissions coal technologies, liquefied natural gas, renewable and energy efficiency technologies and expertise.
- Australia’s long-term and secure LNG supply can help diversify India’s current highly concentrated import supplies from the Middle East.
- For Indian companies, it is a renowned destination because of the sophisticated mining technology available, business friendly rules and regulations.
- Australia can act as a cushion for India’s immigration needs as Australia has a large landmass with a small population.
- India can gain from Australian experience in sports infrastructure which can augment the Khelo India programme and also in establishment of a National sports University.
Significance of India to Australia
- Traditionally, Australia’s concept of Asia has focused on the Asia Pacific incorporating the United States, North and South East Asia, and the South Pacific. Recently, Australia has adopted the terminology of ‘Indo-Pacific’ highlighting the importance of emerging India.
- Australia also sees India’s greater involvement in East Asian affairs, both directly and also institutionally through the East Asian Summit.
- Big strategic issues going forward will be maritime. Continued economic prosperity in Asia relies on maritime stability and keeping open sea lanes which are vital for trade. So maritime concept brings India into strategic frame of the region.
- Australia’s distinctive geo-strategic position as a continent which faces both oceans places it at the center of Indo-Pacific construct.
South China Sea
- Australia’s first foreign policy White Paper in 14 years released in November 2017 has raised alarm over China’s growing assertiveness in the Indo-Pacific region and picked India along with Japan, Indonesia and South Korea “of first order importance to Australia” to hedge Beijing’s ambitions.
Trade and Investment
- India’s demands for infrastructure, power, roads are increasing and this provides business opportunities for Australia.
- Australian government’s India Economic Strategy Report set the goal of lifting India into Australia’s top three export markets by 2035, as well as the third largest destination in Asia for Australian outward investment.
- Australia has a strategic interest of growing economically along with India as it did with China in the past. Higher education is a huge market for Australia.
- Proposed India-Australia Comprehensive Economic Cooperation Agreement (CECA) will open up bilateral investment as well as trade in goods and services.
- The Indian government’s economic development programmes provides great opportunities for Australia’s energy and resources industry.
Significance for the Region
- India and Australia are well-placed to work together on challenges in the Indian Ocean region. The most
important factor driving India-Australia maritime security cooperation is the concept of the ‘Indo-Pacific’.
This novel geo-strategic construct, which integrates the Indian Ocean and Western Pacific Ocean into one unified theatre, is premised on the idea of stronger security cooperation between regional states.
- India-Australia cooperation in maritime security is also driven by both being the member of the Indian Ocean Naval Symposium (IONS) and the Indian-Ocean Rim Association (IORA).
- The Indo-Pacific faces a range of traditional and non-traditional security challenges like changing power dynamics, territorial issues, nuclear proliferation, terrorism, natural disasters and pandemics. In this scenario, the strategic partnership of India-Australia can formidably work towards developing regional security architecture.
- Example: India and Australia opined on the same lines in case of the South China Sea issue, hence strengthening the position of international conventions like UNCLOS.
- India, Japan and Australia participated in their first ever trilateral dialogue and this consultation provides an
exciting avenue for future investments.
- Both the countries are working together to strengthen the East Asia Summit (EAS) – the premier regional forum for strategic dialogue and addressing strategic, political and economic issues.
Revival of ‘QUAD’
- ’Quad’ stands for the quadrilateral formation that includes Japan, India, United States and Australia.
- It will help in upholding the rules-based order in the Indo Pacific and respect for international law, freedom of navigation and over flight; increased connectivity; challenges of countering terrorism and upholding maritime security in the Indo-Pacific.
Challenges in Relations
The depth and scale of the relationship does not yet match the potential of both the countries. Some of the challenges are as under:
Different concerns: China
- Australian concerns have to do with China’s increased activities in the Pacific; while India is concerned about China’s greater presence and influence in the Indian Ocean.
- It is likely that Australia has a certain lack of confidence given that New Delhi seems ambiguous about whether to balance or hedge. These differences might partly have to do with strategic histories.
- In this perspective, Australia has long been an American ally, while India remains uncomfortable about alliances.
Lack of Trust
- While there had been notable development in strategic and defence engagement with Australia in terms of trilaterals between India, Australia, and the United States, and India, Australia, and Japan, the Indian government has decided to go ahead with 2018’s ‘Malabar’ naval exercises trilaterally without including the Australian Navy.
- Although this move underlines India’s desire to not provoke China, it also indicates an insufficient strategic trust between the India and Australia, partly contributed by Australia’s withdrawal from the Quad in 2007.
- Trade is still very narrow – 70% of Australian exports to India comprise only two items – coal and gold, hence there is necessity to broaden this base.
Australia’s ‘457 Visa’ Issue
- The programme allows businesses to employ foreign workers for a period up to four years in skilled jobs where there is a shortage of Australian workers.
- Cause of Concern: Under the new reforms, the applicants must be permanent residents for at least four years – three years longer than at present – and must be committed to embrace “Australian values”.
- Effect: The move is a direct hit on India’s long-standing demand for labour mobility – easing of temporary foreign workers’ entry into Australian projects and relaxing of Australian rules for skilled foreign workers apart from presently over 95,000 foreign workers – a majority of them Indians. This will also affect the future.
Nuclear Deal at Pivot Point
- Although Australia has developed its uranium export industry in recent years, there are still considerable reservations among many in Australia about its sale.
- The key condition for allowing uranium mining was that uranium would only be exported for civilian use to countries that had signed the Nuclear Non-Proliferation Treaty (NPT) – which India has not signed yet. In pursuance of this aspect, Despite an agreement, Australia continued its policy of not supplying uranium to India.
- Cooperation is possible in areas of skill training (to augment Make in India and Skill India Programmes), water resource management and energy sector. Therefore, the scope for cooperation is wide and endless, outweighing the perceived difficulties and challenges.
- Augmented Australia-India ties within bilateral, trilateral, quadrilateral, and other minilaterals and multilateral institutions are a reality that is unlikely to slow down for the foreseeable future.
- The convergence of strategic interests in ensuring an Indo-Pacific order that is free of hegemonic and muscular policies is a glue that will bind India and Australia further in the coming years.
- The two will likely also expand their partnership both in pursuing strategic partnerships and thematic ones like supply chain resilience initiative
- On the whole, The India–Australia strategic partnership has seen impressive advancements in the last few years, but its potential and promise are yet to be fully realised.
- Hence, the need of dedicated attention and political leadership from both capitals to become more than a work in progress going forward.