INDIA NEWS
Nov 1-15, 2021 - Vol 2, Issue 9
EDITORIAL
From The Editor’s desk China’s assertiveness
Stronger business and trade ties will shape Aus-India strategic partnership
The Economics Times
brings India and Australia closer By Prof. Srikanth Kondapalli The recent upsurge in IndiaAustralia relations has been a subject of debate for the strategic implications of such bilateral ties in the maritime domain, economic cooperation, technological transformation and security cooperation.
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ndia’s Minister of Commerce and Industry, Consumer Affairs and Food, and Public Distribution and Textiles Piyush Goyal, and Australia’s Minister for Trade, Tourism and Investment, Government of Australia Dan Tehan MP met in New Delhi to discuss ways to speedup negotiations towards formalizing India-Australia Comprehensive Economic Cooperation Agreement (CECA). Some of the sticky points include resolving tax-related issues concerning the Indian software firms in Australia, and boosting the two-way trade between the two countries. The immediate outcome of the meeting was a shared commitment to conclude the full CECA agreement by end2022 and an interim agreement by December 2021 to boost and liberalise trade in goods and services. In the meeting both Ministers recognized that having a balanced trade was key to expanding trade and investment flows for both economies, and strengthening a rules-based international trading system. At the strategic level, India and Australia remain committed to building and strengthening a rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system furthered by the World Trade Organization. Currently, Australia and India bilateral trade rests at AUD$30 billion which is way below their potential, and in order to make India one of the top three trading partners (currently 7th) of Australia by 2035, CECA is vital. Australia imports petroleum products, medicines, polished diamonds, gold jewellery, apparels among other items from India, and India imports coal, LNG, alumina and nonmonetary gold from Australia. In the services sector, India exports travel, telecom and computer, government and financial services, and relies on education and personal related travel from Australia. It is important to highlight that much of the intensity in their bilateral engagements in recent months has been driven by Australia’s growing tensions
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with China over the treatment of Uighur Muslims in Xinjiang, Hong Kong crackdown, alleged foreign interference in Australia’s internal political functioning, tariff wars and impact of Covid-19 pandemic on the one hand, and India’s military tensions with China in Doklam and Ladakh, on the other hand. India’s External Affairs Minister Dr Subrahmanyam Jaishankar in an interview with a policy think-tank in Australia said that he takes great satisfaction in how the Australia-India bilateral relationship has deepened in the last year and a half. As two cricket playing Commonwealth members, both share interests and values and their ties should be independent of their respective relationship with China, he said. It will not be an exaggeration to submit that the AustraliaIndia ties that elevated to Comprehensive Strategic Partnership in June 2020 have reached a historical high and are poised to transform into a significant relationship in the Indo-Pacific. Be it Australia choosing to divert agricultural exports to India from China or the deepening maritime cooperation and the evolution of Quad, both sides have demonstrated a firm resolve to shape the postCovid order. Australian Senator Simon Birmingham, who led a trade delegation to New Delhi in February, had said, “Australia must look into alternative markets in the European Union and India.” The Department of Foreign Affairs and Trade itself has observed that India’s youthful population and diversified growth trajectory present significant opportunities in education, agriculture, energy, resource, tourism, healthcare, financial services and infrastructure among other areas. Both sides have formalised over 20 MoU last June covering some of these areas during the Modi-Morrison virtual summit. Their two-way trade has risen from $13.6 billion to $30.4 billion in 2018, but it is still below their full potential. By 2035, both sides aim to double their bilateral trade and Australia seeks to bring India in its top five trading partners (currently 7th).
Barring a few incidents, IndiaAustralia relations remained cordial although dormant in nature for long. Ironically, China’s assertiveness and the challenges thereof have brought New Delhi and Canberra together. Both Canberra and New Delhi faced China’s wrath in recent times. Australian calls for investigation into the origins of globally disastrous Covid-19 at the World Health Assembly last year rattled Beijing which retaliated by restricting import of Australian products. Beijing also expressed its displeasure at the decision of Australia to exclude Huawei from the 5G network rollout, although. Beijing has not clarified its back-channel collection of data through such networks. Australia also expressed concerns over Chinese influence in Australian business, economics and politics, including continuing allegations of espionage. On September 15, leaders of Australia, the United Kingdom and the United States announced a nuclear-powered submarine (SSN) deal to build such vessels for the Australian Navy. This is part of a series of arrangements that they intend to announce to strengthen trilateral security partnership. Writing in the communist party’s outlet People’s Daily on October 19 criticised the AUKUS for creating “global instability” and “multiplying the risk of nuclear proliferation”. However, China had already deployed six Shang-class nuclear-powered submarines, besides proliferating nuclear and ballistic missiles or technologies to Pakistan, Iran and other countries. India as well is reeling under heavy pressure from Beijing, despite Prime Minister Narendra Modi’s two “informal summit meetings” with President Xi Jinping at Wuhan and Chennai. On the other hand, China stealthily mobilised troops in the western sector of the disputed border in violation of all the previous border protocols of 1993, 1996, 2005 and 2013 and killed scores of Indian troops in June 2020. Today India and China have mobilised heavily in their border areas. Several other issues also brought India and Australia together. Both are dependent on trade and commerce but Beijing recently
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has been obstructing economic activity. China’s militarisation of the crucial sea passages of the South China Sea affected both India and Australia who are dependent on these seas for their trade and commerce. On August 29, China announced new maritime restrictions on vessels passing through the South China Sea, despite its assurances previously to the international community on no such restrictions in the region. This has further rattled several countries including India and Australia. Australia had exhibited its sympathies to India whenever the latter was under siege by Beijing. To recall, during China’s border clashes with India in 1962, the then foreign minister Richard Casey criticised Beijing as an “invader” against India. During the Chinese encroachment on Bhutanese land at Dokhlam in 2017 and the ensuing standoff with India, visiting foreign minister Julie Bishop urged New Delhi and Beijing to resolve the issue peacefully because Australia did not want to see any escalation that could result in “miscalculation” and “misjudgement”. More recently, Australian High Commissioner to India Barry O'Farrell seconded India's suggestion for deescalation in the western sector of the border and paid tributes to the 20 Indian martyrs who were killed by China on June 15, 2020. These challenges nudged the two countries to coordinate and cooperate at the bilateral and multilateral arena. China’s intended punishment of Australia and India has only boomeranged with the latter coming together and exploring mutually beneficial opportunities but most importantly opening up a new strategic space for the previously hesitant leaderships in Canberra and New Delhi. Both today interact extensively in the Commonwealth, Indian Ocean Region Association, ASEAN Regional Forum, East Asian Summit and recently in the Quadrilateral Security Dialogue (Quad - along with the United States and Japan) and in Supply Chain Resilience Initiative (with Japan in April 2021) and other avenues on various issues of concern.
This indicates not only shedding off of their previous hesitancy but also positively reshaping bilateral cooperation. For instance, after the Quad was formed to provide relief to the disastrous Tsunami in 2004-05 in Southeast and South Asian regions, Australia backed off from the Quad activities after the September 2007 Malabar naval exercises between the US, Japanese, Australian and Indian navies in Bay of Bengal. In the presence of China’s foreign minister, the then Australian foreign minister Smith stated in February 2008 that Canberra “wouldn’t be proposing to have a dialogue of that nature” again. Subsequently, the Kevin Rudd government, under pressure from China, backed off from participating in multinational naval exercises till November 2020. In the background of common challenges, the coming together of India and Australia was sustained by the frequent visits of the two leaderships. The November 2014 visit of Prime Minister Narendra Modi and his speech to the Australian Parliament is significant. He stated: “Australia will not be at the periphery of our vision, but at the centre of our thought”. A Comprehensive Strategic Partnership agreement was signed by Modi and Morrison in a virtual summit meeting in June 2020, graduating from strategic partnership of 2009. As a follow up in September 2021 both held a 2+2 dialogue between foreign and defence ministries at New Delhi. India has such a format only with the US and Japan. Tony Abbot’s early August 2021 visit to India as a Special Envoy on trade issues and pushing the much-awaited Comprehensive Economic Cooperation Agreement between the two countries. Bilateral trade was $6 billion in early 2000s, increased to over $21 billion by 2011 but declined to $ 17 billion in 2020 due to the pandemic disruptions. With the supply chain resilience initiative, they intend to enhance digital technology and diversify trade and investments. Also, taking a cue from Beijing’s trade restrictions, Indian firms quickly purchased 2 million tonnes of coal for domestic electricity generation at a discount from Australia in October 2021. These trends, of course, need to be sustained and strengthened over a long period of time by both countries. Professor in Chinese Studies at Jawaharlal Nehru University, New Delhi
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