- Why in news?
§ India and Australia held the first virtual Summit in June 2020.
- Example questions:
§ "Despite differences that remain, there is clear evidence of growing strategic convergence between India and Australia in the realm of security" Discuss [10 marks, 150 words]
§ Shared Strategic concerns, deeper people-to-people contacts and economic ties are driving the Indo-Australia cooperation. Elaborate [10 marks, 150 words]
§ "India and Australia needs to build a series of bilateral and minilateral platforms for regional security cooperation to limit the dangers of the growing geopolitical imbalance in the Indo-Pacific" Discuss [10 marks, 150 words]
§ To what extent the use of soft power like sports, cultural exchange, people to people contact help in enhancing India-Australia cooperation? Discuss with suitable examples [12.5 marks, 200 words]
§ Australia has loomed large in modern India's consciousness - as the land of cricket champions. But, there was little else binding the two nations during the 20th century. This was despite the common political values and the shared English language.
- Four Deep Structural impediments which prevented India-Australia Cooperation
§ Logic of Cold War: Australia was among USA's and Britain's closest allies, while India had opted for non-alignment.
§ Pakistan Factor: Here again, Cold War imperatives meant that Australia sided with Pakistan- a member of Anglo-American alliances - rather than India.
§ India's Nuclear status outside NPT led to Australia taking a particularly strong stand against India specially after the 1998 nuclear test.
§ However, the NSG waiver of 2008 and the bilateral civil nuclear agreement in 2014-15 largely addressed the concern.
§ Absence of Economic Content in the past
§ This has changed today and India is among top five export destination of Australia and Australia is a top 20 trade partner for India.
§ Trade in services have specially done well in areas like education, ICT, and tourism. But, even now merchandize trade is way below potential.
§ Absence of People to People Contact - the backdrop to this was the "white Australia" policy which discouraged migration from Asia.
§ In recent years, however, Indian immigrants are among the largest contributors to Australia's population growth.
- The End of Cold War, India's nuclear mainstreaming, Australia's demographic diversification and a growth in economic ties have today altered the reality of India-Australia relations
§ Over the last decade, though, there has been a steady improvement in the quality and intensity of the political, commercial, cultural, educational, and technological engagement between the two nations.
- Other Commonalities which bring India Australia together
§ System of government- Both are liberal democracies with federal structure, free press and independent judicial system.
§ Security and stability of Indo-Pacific is fundamental to both of us
§ English language, cricket, and Indian diaspora also provide important link between India and Australia.
§ Australia is in India's extended neighbourhood.
§ Why Australia Needs India - Strategic reasons, Market, Education Sector, Role of Indian diaspora in Australia's growth etc.
§ Why India Needs Australia - Strategic reasons, Energy - Uranium, huge natural resources etc., Technologies - Agriculture-Mining etc., Safety of India's diaspora, Support at international forums - UNSC, G-20, IORA etc.
§ Note: During the June 2020 summit, Australia reiterated it's support for India's permanent membership to UNSC. In recent past Australia has supported India's membership of Australia Group & Wassenaar. It also favors India's membership to NSG.
- Present Drivers of India Australia Cooperation
§ After decades of being indifferent to each other, India and Australia have emerged as close strategic partners in the Indo-Pacific. This is evident in the number of high level visits and joint military exercises between the two countries. The joint naval exercise, AUSINDEX, is a manifestation of this synergistic approach to maritime security.
§ Key factors that is leading to strategic convergence:
§ China's aggression and assertive foreign policy - and its implications for Indo-Pacific.
§ Bilateral issues of China with both countries
§ India's border dispute with China and recent infiltration of PLA in Ladakh
§ China's growing interference in Australian domestic politics and its attempt to use trade for geopolitical purposes have raised fundamental questions about its long term reliability for Australia.
· Further, when Canberra joined some other nations in calling for an independent enquiry into the origins of the novel coronavirus, China threatened boycott of Australian products in response. Later they suspended Australian Beef Import and imposed tariffs on barley imports.
· Australia has also invoked national security argument to keep Huawei out of Australia's 5G infrastructure, blocked sale/lease of land to Chinese companies and consortium on security ground.
§ Anxieties about USA's strategic commitment to the Indo-Pacific.
§ There are legitimate concerns about US' unpredictability especially under Donald trump. Therefore, major countries in the region, such as India, Australia, Japan etc. need to work together to compensate for American distraction.
§ Manifestation of Strategic Convergence
§ Growing number of military exercises in all three services, as well as staff talks and military training initiatives. In 2019, the countries took part in the third edition of AUSINDEX, a large-scale anti-submarine exercise in the Bay of Bengal.
§ The upgradation of bilateral 2+2 dialogue to ministerial level during the June 2020 summit
§ Trilateral dialogues with Japan and Indonesia adds heft to strategic coordination.
§ Quad Security dialogue (India-USA-Japan-Australia) is the biggest manifestation of the increasing strategic convergence between Australia and India.
§ Signing of a Framework for Security Cooperation between India and Australia in 2014 also provides the much needed impetus for greater security engagement between the two countries.
§ Finalization of mutual logistic support Agreement during the June 2020 summit.
§ Agreement on Defence S&T Implementing Arrangement signed during the June 2020 summit.
§ Some Concerns in strategic relations
§ Different set of concerns regarding China: Australia's concern is regarding increasing activities of China in the Pacific whereas India is more worried about China's increased penetration in the Indian Ocean.
§ Though New Delhi defines pacific as its secondary area of interest and for Canberra Indian ocean is its second Sea, but military capacity limitations on both sides means that there is a challenge in deploying resources in secondary areas of interest.
§ India has also been uncertain about Australia's reliance since it backed out of Quad in 2007, though, this uncertainty is slowly disappearing.
§ Deficit of Military Capabilities - especially on the Indian side. While we are participating in joint exercises, our ability to come to each other's aid during conflict remains in question.
§ Way Forward:
§ Strategic cooperation is only expected to intensify in future as the threat of hegemonic China is not likely to disappear anytime soon in future.
§ Both countries should appreciate the increasing relevance of working together on a number of areas including maritime security, the establishment of blue economy, infrastructure and connectivity initiatives, and strategic industry collaboration.
§ Joint financing of infrastructure by India and Australia in the Indo-Pacific to strengthen the economic order in the region.
§ "It is only by building a series of overlapping bilateral and minilateral platforms for regional security cooperation that Delhi and Canberra can limit the dangers of the growing geopolitical imbalance in the Indo-Pacific" C Raja Mohan
§ The defence forces of the two countries should develop strategic coordination in the various sub-regions of the Indo-Pacific Littoral.
§ Eastern Indian Ocean connects Indian Ocean and Pacific Ocean, and is at the heart of the Indo-Pacific. "Delhi and Canberra should initiate a full range of joint activities, including on maritime domain awareness, development of strategically located islands and marine science research" C Raja Mohan
· Island of A&N and Cocos Island both in Indian ocean offer a chance to extend patrols and strategic ties.
§ The sea lines of communication between Indian and Pacific Ocean run through Indonesian Archipelago. Since there is a shared political commitment to the Indo-Pacific idea between Delhi, Canberra and Jakarta and since they are under growing pressures on them to secure their shared waters, India and Australia must seek trilateral maritime and naval cooperation with Indonesia.
§ Japan, Britain and France are other natural partners for India and Australia in Indo Pacific.
§ Trilateral Dialogues between India-Japan and Australia should be expanded from diplomatic level to practical maritime cooperation on the ground.
§ France is also resident power in Indo-Pacific and have shown eagerness to develop trilateral cooperation with India-Australia. India should endorse the initiative.
§ Britain also wants to return to oriental seas. Britain continues to lead the so-called five Power Defence Arrangement 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. India should explore possible engagement with FPDA.
§ India should also give more thought on involving Australia in the Malabar exercise - it will send a message that India consider Australia as a legitimate security partner.
§ Quad members need to enhance discussion on operational aspects of their cooperation - this would lead to greater synergy between their forces while dealing with common problems.
§ In Addition, developing a common approach to certain ideas and principles like free, open and transparent Indo-Pacific is important.
§ Strategic partnership between the two countries have seen considerable advancement in the recent decade. But, to achieve the full potential, it will require dedicated attention and political leadership from both the capitals.
- Current Situation
§ In 2018-19, the bilateral trade was more than $20 billion with a deficit of $10 billion for India. this bilateral trade is way below potential especially when we compare China-Australia trade which is worth more than $150 billion.
§ Both countries also have an investment of about $10 billion in each other's country.
§ Recently a report published by Australia - "Indian Economy Strategy to 2035" says that no single market over the next 20 years will offer more growth opportunities for Australia than India.
§ The report highlighted 10 sectors that were Australia's competitive advantages match India's needs, and 10 state in India where we should focus efforts. The sectors include flagship education sector, agribusiness, resources etc.
- Way Forward
§ Both countries should utilize current innovations in digital trade. Global attention towards digital economics, along with technological innovation in both countries, especially blockchain technology, is posed to enhance both maritime connectivity and ease of doing business.
§ The recent decision to reinitiate negotiations on Comprehensive Economic Cooperation Agreement should be backed by timeline to finalize it ASAP.
§ India's concerns regarding RCEP should be looked into with priority. RCEP can act as a great opportunity not only to widen the market, but also for MSME's to enter the global value chains.
§ India shouldn’t be overcautious about its trade deficit with Australia - it is more important to address other equally pertinent issues such as nature of commodities being traded and their subsequent effect on the producers, consumers, and governments. As a corollary trade deficit shouldn't dictate the terms of negotiation for a trade deal.
§ "A confident Indo-Pacific strategy cannot be sustained by a policy of economic timidity": Shyam Saran
§ Australia is a world leader in sectors like Agricultural, Animal Husbandry innovations, Mining etc.
§ Australia's world class Agricultural sector can support India all the way from better crop and herd productivity to storage and transport, cold chain supply, food-processing and retail.
§ Australia is a mining superpower and India can benefit from the technology, expertise and the capital that will help unlock India's vast mineral resources.
§ Australia has started supplying nuclear material to India starting 2017.
§ Indian Diaspora - Around 3% of Australia's population (700,000) is of Indian diaspora. They are continuously increasing there presence in business and politics. People to People links and Vibrant Indian origin community plays a crucial role in strengthening India-Australia relations.
§ Educational linkages and collaborations have also increased dramatically in recent years.
§ The changing political landscape in UK and USA and their VISA policies is going to make Australia an even more attractive destination for Indian Students especially since Australia boasts of some of the leading universities in the world.
§ The early control of COVID-19 in Australia also makes it possible that there universities would be open before the colleges in Western countries thus bringing more Indian students to Australia.
§ As more Indian students graduate from Australian Universities, people to people contact and institutional linkages will only become stronger.
§ Tourism (especially from India to Australia) is on the rise. More than 3,00,000 Indian tourists visited Australia in 2017.
§ Sports is emerging as another key binding factor in India-Australia relations. While cricket is the obvious synergy in this regard, there is a growing interest in other sports. India has an Australian Football league club which plays in the Australian Football international Cup, for example.
§ The Indian Film Festival in Melbourne, as well as many other growing collaborations in the arts have been encouraged by Government and also continue to grow organically.
§ A number of Institutes promote the Australia-India bilateral relationship and have played a leading role in bringing the countries closer together. The Australia Indian Institute, the Australia India Youth Dialogue, The Center for India Australia Studies, the Australia India Business Council etc. operate independently of the prospective governments but are important stakeholders in the bilateral relationships.
§ In fact the recently released "Indian Economy Strategy - 2035" also calls Australian government to establish different relations with Indian states as India is best seen not as a single economy but as an aggregation of very different state economies, each growing at different rates.
· KEY HIGHLIGHTS OF THE JUNE 2020 VIRTUAL SUMMIT between the two Prime Ministers - Narendra Modi and Scott Morrison
§ The summit was first of its kind virtual bilateral summit and indicated that both sides didn't want the present momentum in bilateral relationship to get disrupted.
§ Joint Declaration of a 'Shared Vision for Maritime Cooperation in the Indo-Pacific'.
§ "Both India and Australia share a vision of a free, open, inclusive and rules-based Indo-Pacific region to support the freedom of navigation, over-flight and peaceful and cooperative use of the seas by adherence of all nations to international law including the UNCLOS and peaceful resolution of disputes rather than through unilateral or coercive actions"
§ Elevation of bilateral ties to a "Comprehensive Strategic Partnership"
§ Australia is only the fifth country with which India has signed CSP after UK, Indonesia, Vietnam and UAE.
§ CSP is expected to raise the level of trust required to improve the trade and investment flows.
§ Mutual Logistic Support Agreement (MLSA) was also signed.
§ It will allow both militaries the reciprocal use of bases, humanitarian and disaster relief cooperation, port exercises, and passage exercises.
§ Australia is only the 4th country after France, Singapore and USA to sign a mutual logistic support agreement with India.
§ Upgradation of 2+2 dialogue to ministerial level (from secretary level) who will meet to discuss strategic issues at least every two years.
§ Framework agreement on Cyber and Cyber enabled Critical Technology domains.
§ MoU on mining and processing critical and strategic minerals including Australian rare earth metals used for electronics.
§ MoU on governance, vocational training and water management.
§ Decision to recommence talks on Comprehensive Economic Cooperation Agreement, suspended since 2015.
§ The two leaders also committed to a new phase of the Australia-India Strategic Research Fund to promote innovative solutions for responding to and treating COVID-19.
· Analysis of summit
§ Welcome progress on security cooperation - CSP, MLSA, Upgradation of 2+2 dialogue, Cyber technology etc.
§ Not substantial progress on trade - a decision to restart the CECA negotiation is the only positive. But Delhi inability to wrap up any new bilateral trade agreement with any of the major countries recently raises a number of concerns.
· Way Forward
§ At Strategic Level
§ Develop strategic coordination in the various sub-regions of the Indo-Pacific Littoral
§ Involve Australia in Malabar
§ Enhance Quad Discussion in operational Aspects
§ At economic level
§ Give up economic timidity and work aggressively towards CECA and RCEP.
§ Enhancing Maritime Connectivity in the Indo-Pacific is of utmost importance in the face of India and Australia's effort to strengthen bilateral ties. The two countries should promote people to people, business to business and people to business interconnectedness in the region. Indo Pacific is not only important for commerce but also for the geo-politics and geo-strategy.
§ Drive for Digital India and Australia's driver for digital innovation to fit into the fourth industrial revolution - are highly complementary in increasing access in the maritime spaces, bringing down costs and augmenting the feasibility of trade opportunities between India and Australia.
§ "The current downturn in the global economy certainly limits the immediate possibilities for realizing the full potential of commercial relations between India and Australia. But there are a host of emerging issues - from reforming the WHO to 5G technology and from strengthening ISA to building resilience against Climate Change and disasters - that lend themselves to intensive bilateral political and institutional engagement.