The increasing recognition by Australia and India of the benefits that each has to offer has the potential to invigorate the relationship, a hope that was carried forward this year by the visits to India of the Australian Prime Minister and Foreign Minister.
In 2014, the two newly-elected Prime Ministers, Narendra Modi and Tony Abbott, added vigour to the lack of enterprise, even neglect, that had largely characterised the India-Australia relationship.
Abbott restated that India was at the forefront of his country’s international partnerships, building on the Strategic Partnership (2009) and the Framework for Security Co-operation agreed in 2014. India’s Prime Minister stated in his speech to the Joint Sitting of Parliament in Canberra on 19 November 2014, that Australia was no longer at ‘the periphery of India’s vision but at the centre of its thought[s]’, an equally optimistic perspective.
For the first time, the Australian and Indian Prime Ministers undertook state visits to New Delhi and Canberra in the same year, underlining the potential depth of their countries’ strategic partnership and their intention to pursue converging interests, to “unlock” their economic potential, and building rapidly on the Comprehensive Economic Co-operation Agreement (CECA) that was signed in 2009 and launched in 2011. At that time newly significant, it endorsed potential benefits for both countries across a range of areas, notably not dissimilar to the bilateral agendas of earlier governments: similarly progressive but the completion of which remained a distant goal.
In mid-2016, Australia’s former Trade Minister, Andrew Robb, noted that while there were still some ‘big differences’ to overcome, the ‘long-awaited trade deal’, CECA, could be completed if both states made it a priority. There had been nine formal CECA talks between previous Australian and Indian Governments, and the present ones, the most recent having been held in September 2015.
Recent India- Australia bilateral engagements include Comprehensive Economic Agreement (CECA), the Civil Nuclear Co-operation Agreement and the Framework for Security Co-operation. Announcement of Australia’s India Economic Strategy is no less significant.
Difficulties remain, however, including – as expressed by India – a lack of equivalence in tariff structures, the disparity in market size, and Australian restrictions on, for example, the import of some agricultural produce, and the availability of migrant work visas. Similarly, tariff barriers and trade restrictions are faced by Australia – sticking points that are all too familiar to observers of Australia-India relations.
While Australian Trade Minister Steven Ciobo has noted that the CECA, or free trade agreement (FTA) negotiations, continue and remain in play, they proceed alongside participation with India in the Regional Comprehensive Economic Partnership (RCEP), which is an ASEAN-centred proposal for a regional free trade area. RCEP would include the ASEAN member states and states that now have FTAs with ASEAN, including Australia and India, thus providing a further opportunity to collaborate, this time in a multilateral setting.
RCEP has been in play since late 2012 and, while it also usefully forms part of a comprehensive strategy for lowering trade barriers and improving market access, it too will take time to make its effect felt.
INDIAN ECONOMIC STRATEGY
Turnbull, in an attempt to cut through the lengthy negotiations already underway, announced a significant new initiative in April 2017 during his meeting with Modi: the commissioning of an India Economic Strategy to identity for his government the economic opportunities that India presents for Australia and how Australia should approach them.
The passage of Civil Nuclear Transfers to India Act by Australian Parliament in December 2016 has paved the way for Uranium sales to India. The law received bipartisan support from the major parties with little or no publicised debate. And the first shipment of uranium was despatched without apparent fanfare in Australia or India, in July.
Besides in ASEAN, the two countries are also engaged in the Indian Ocean Rim Association (IORA). Their achievement, broadening IORA’s areas of responsibility to include co-operation across the Indian Ocean to counter terrorism and violent extremism, was also given expression in the MoU exchanged at the Prime Ministers’ April 2017 meeting. Titled ‘Co-operation in Combatting International Terrorism and Transnational Organised Crime’, these previously-unexplored fields indicate new collaborative ventures.
IORA’s twenty-one members embrace Indian Ocean states whose priority areas of co-operation – trade, communication and security across the Indian Ocean – form one base on which the bilateral relationship rests. Both countries remain committed to their defence ties. Turnbull and Modi at their meeting re-endorsed long-held commitments to peace and prosperity in the Indo-Pacific, and recalled more recent ventures: the Special Forces Bilateral Exercise in October 2016, to be repeated this year, and anticipated the first bilateral Army-to-Army exercise to take place in 2018.
The first AUSINDEX (Australia-India Exercise) bilateral naval drill was held in 2015. The second, held in the Indian Ocean coast off Western Australia in June 2017, was a new venture and a significant move in the bilateral relationship. Demonstrating interoperability in a joint offshore exercise in Australian waters, it built a new link into regional security.
Julie Bishop’s visit to India in July this year saw her give the Indo-Pacific Oration in Delhi for the second time, building on her first, delivered in July 2015. She noted in it the strengthening of the bilateral relationship and cited opportunities for a rules-based regional order linked by Indo-Pacific democracies. The eleventh India-Australia Foreign Ministers’ Framework Dialogue, co-chaired with Sushma Swaraj, the External Affairs Minister, was held during her visit. As the main bilateral institution, issues of shared concern including counter-terrorism, defence, security, and trade and investment, reflected Turnbull’s and Modi’s discussions three months earlier.
The India – Australia bilateral relationship has been largely a case of “one step forward, two steps back”. Australia’s on-again, off-again agreement to sell uranium to India undermined progress between 2008 and 2011, and attacks on Indian students studying in Australia in 2009 were damaging.
The significant out of her visit was the signing of a framework agreement to join the International Solar Alliance (ISA), which was launched by Modi and then French President François Hollande in Paris at the UN Summit on Climate Change in 2015. It is of particular importance in a bilateral sense in that its headquarters are in India.
ISA aims to provide technical and financial support to developing countries within the tropics to tap solar power. Largely financed by France, and with funds from the Indian Renewable Energy Development Agency (IREDA) and the Solar Corporation of India (SECI), it opens new, or additional, opportunities for the Australian Government and for state and private enterprises, with those agencies. It is a significant development that can take the energy aspects of the bilateral relationship forward.
Prime Minister Turnbull announced in April a significant new endeavour, which in essence seeks to reverse familiar attempts to promote Australia in India. The object is to better position Australia to manage the complexities of partnering with India, not only as a major emerging economy, but also in the broad strategic context. The aim is to identify opportunities for Australian businesses in India, and the strategy will involve extensive consultations and a public submission process.
Titled the “India Economic Strategy”, its brief is to position Australia to partner with India in the course of its continuing economic rise, including the complex security environment in the Indo-Pacific and to factor in beside India’s economic trajectory, its political and governance directions.
Among the aimed-for outcomes are ‘an analysis of the domestic and international policy settings required for Australia to capitalise on the opportunities offered by India’ and a ‘list of practical options for how Australian expertise can be utilised to support economic reform in India and how these would create opportunities for Australian businesses’.
An ambitious programme, informed by public submissions, it will be led by Peter Varghese, a former Australian High Commissioner to India, and presently a University Chancellor.
Well, the Australia-India bilateral relationship has, frequently, been one of one step forwards followed by two steps back. Now, a significant step forwards may have commenced.
(- Based on a FDI paper by Dr Auriol Weigold, an Adjunct Associate Professor at the School of Government and Politics)