India-Australia Bilateral Relationship – Explained, pointwise

Introduction

The India Australia relationship has undergone rapid evolution in recent years, developing along a positive track, into a strategic partnership. The two nations have much in common, underpinned by shared values of a pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement and increasing high level interaction. Recently, the 2nd India-Australia Virtual Summit took place on March 21, 2022. During the summit, the leaders reviewed the multi-faceted relationship between the two countries and exchanged views on regional and global developments. The Summit follows the historic first Virtual Summit on June 4, 2020 when the relationship was elevated to a Comprehensive Strategic Partnership.

What is the history of India Australia relationship?

The historical ties between India and Australia started immediately following European settlement in Australia from 1788. All trade to and from the penal colony of New South Wales was controlled by the British East India Company through Kolkata.

India and Australia established diplomatic relations in the pre-Independence period, with the establishment of India Trade Office in Sydney in 1941. The end of the Cold War and simultaneously India’s decision to launch major economic reforms in 1991 provided the first positive move towards development of closer ties between the two nations. 

With the passage of time, the relationship gained momentum towards a strategic relationship, alongside the existing economic engagement. Since the elevation of relationship in 2020, the countries have advanced practical actions on cyber and critical technologies, maritime affairs, defense ties, economic and business links and Quadrilateral cooperation.

What are the key outcomes of the 2nd Virtual Summit?

Announcements:  (a) Establishment of Annual Summit between India and Australia; (b) Establishment of General Rawat India-Australia Young Defense Officers’ Exchange Programme; (c) Return of artefacts by the Government of Australia; (d) Similar Tax benefits for investments by Australia’s sovereign and pension funds in India as in Australia; (e) Financial Aid for Pacific Island Countries under Infrastructure for Resilient Island States (IRIS) and International Solar Alliance(ISA) initiatives 

Signed Documents: (a) MoU on Co-Investment in Australian Critical Minerals Projects between Khanij Bidesh India Ltd. (KABIL), India and Critical Minerals Facilitation Office (CMFO), Australia; (b) Letter of Intent regarding Migration and Mobility Partnership Agreement; (c) Letter of Arrangement between India and Australia for Educational Qualifications Recognition; (d) MoU for cooperation and collaboration on broadcasting between Prasar Bharati, India and Special Broadcasting Service (SBS), Australia.

A Joint Statement was issued on the occasion covering various aspects of the deepening Comprehensive Strategic Partnership. 

What progress has been made in India Australia Relationship in recent years?

Economic Cooperation: Bilateral trade between the two countries stood at about US$ 12.5 billion in FY 2020- 21 and has already surpassed US$ 17.7 billion in the first 10 months of FY 2021-22. Key imports from Australia include coal, gold and LNG while key exports to the country from India include diesel, petrol and gems and jewellery.

Security Cooperation: India and Australia are both members of the Quad (Quadrilateral Security Dialogue) along with the US and Japan.  Further Australia participated in the 2020 and 2021 edition of Malabar Naval exercise.

Cultural Cooperation: Like India, Australia’s story stretches back tens of thousands of years. Australia’s Indigenous peoples are custodians of the oldest continuing civilisation in the world. This is the reason the Australian government returned 29 culturally significant artefacts to India.

Science and Technology: The countries have established an Australia-India Strategic Research Fund {(AISRF) – a pillar of collaboration on science, technology and research} and successfully conducted the 2021 India Australia Circular Economy Hackathon.  Australia is also supporting India’s Gaganyaan Space Program.

People to People Ties: Australia is investing in India’s talented young people through a new Future Skills Initiative between education and training providers and industry. This complements the Australian government’s significant new Maitri scholarships and fellowships which gives Indian students and researchers the chance to experience Australia’s world class education system.

Energy Cooperation: A Civil Nuclear Cooperation Agreement between the two countries was signed in 2014 The agreement came into force in 2015 and provides the framework for substantial new trade in energy between Australia and India.

Regional and Multilateral Cooperation: Both the countries are part of QUAD, G20, WTO, WHO’s COVAX, ISA etc. regional and multilateral initiatives.  

What is the significance of India Australia relationship?

Indo-Pacific Stability: Both nations aspire a free, open, inclusive, and prosperous Indo-Pacific. The establishment of QUAD grouping and active participation by both is necessary to counter China’s actions in the region.

Gateway to Pacific Countries: The growing cooperation would help India get better access to Pacific Island nations like Kiribati, Solomon Islands etc. as Australia enjoys a high degree of influence over them. 

Indian Diaspora: As per the Australian Bureau of Statistics’ 2016 census, 619,164 people in Australia declared that they were of ethnic Indian ancestry which made 2.8% of the Australian population. This huge number induces India to work in tandem with Australia for ensuring their well being and development.

Upholding International Law: Both the nations have a firm commitment on a rule based international order. They believe in sovereign equality of nations and progression based on mutual respect and understanding.

Geo Strategic Considerations: Considering Australia’s proximity with the Indian Ocean, active engagement is desired for maintaining India’s strong position in the Indian Ocean region. Further, Australia’s support is desired for getting membership of the Nuclear Suppliers Group and bringing reforms to UNSC.

What are the concerns impeding the relationship?

India’s stand on Russia- Ukraine crisis: Australia has criticized Russian invasion of Ukraine and sided with the U.S. and western countries. However, India has refrained from criticizing Russia over the issue. This can create differences in bilateral discourse and the functioning of QUAD.  

No Free Trade Agreement: Both the nations have been interacting and communicating with each other for decades but have failed to create a consensus on a Free trade agreement.

China’s Discontent: China is unhappy with growing security cooperation between Australia and India. The Chinese government responded to the Quadrilateral dialogue by issuing formal diplomatic protests to its members, calling it “Asian NATO”.

Lack of Uranium Supply: The progress on uranium supply has been very low, despite efforts from both sides. In 2017, Australia had sent its first uranium shipment to India but that was cited as “a small sample of uranium” transferred “purely for testing purposes”.

What lies ahead?

First, the countries should focus on concluding an Early Harvest Agreement and later on signing a Comprehensive Economic Cooperation Agreement (CECA). An early harvest trade agreement is used to liberalize tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive FTA (Free Trade Agreement) is concluded.

Second, the High Commissions of both the nations should ensure that the proposed agreements are duly signed in future.

Third, interaction should be enhanced in the emerging fields like cyber security and cyber governance. The inaugural India-Australia Foreign Ministers’ Cyber Framework Dialogue held on 12 February 2022 is a positive step in this regard.

Fourth,  both India and Australia can work to remove the obstacles in supplying Uranium from Australia to India. This would help India attain its Energy Security and reduce the reliance on fossil fuels.

Conclusion

The virtual meeting reinforced the warmth and close bonds between India and Australia. Leaders of both sides reiterated their commitment to driving the Comprehensive Strategic Partnership to new heights and working as the rule of law in the international arena.

Source: The Hindu, Ministry of External Affairs