INDIA – AUSTRALIA
Current Relations
- Economic
- Bilateral Trade: $30 billion, making India the 5th largest trade partner of Australia.
- Trade Relations: Notable trade deficit for India.
- Key Exports from Australia: Refined petroleum, medicines.
- Key Imports to India: Coal, copper ore, gold.
- Bilateral Economic Engagements
- Strategic Engagement: The 2020 Virtual Bilateral Summit focused on a “Comprehensive Strategic Partnership.”
- Economic Cooperation:
- India Economic Strategy: Australia aims to identify key investment sectors and destinations.
- CECA: Comprehensive Economic Cooperation Agreement formulation is ongoing.
- Nuclear: Civil Nuclear Cooperation Agreement in 2014, facilitating uranium supply.
- Business: The India-Australia CEO Forum focuses on B2B engagement across sectors from agribusiness to IT.
- Cyber Cooperation: Agreement on Cyber and Cyber-Enabled Critical Technology to enhance digital economy and cybersecurity.
- Science and Technology: The Australia-India Strategic Research Fund (AISRF) supports bilateral scientific collaboration.
- Strategic Cooperation
- Mutual Logistic Support Agreement: Strengthens formal defense cooperation.
- Technical Agreement: On White Shipping Information Exchange for maritime security.
- Dialogue Mechanism: Progress made in the “2+2” dialogue framework for defense and foreign affairs.
- Maritime Security:
- Engagements with Indian Ocean Naval Symposium.
- Pacific Step-Up (Australia).
- India’s initiatives for Pacific Island Security.
- Joint Exercises: AUSINDEX
- Malabar Invitation: For the first time Australia participated in the Malabar exercise in 2022.
- Multilateral Engagements
- International Solar Alliance
- East Asia Summit
- East Economic Forum
- QUAD
- India-Australia-Japan Trilateral Dialogue
- Indonesia-Australia-India Trilateral Dialogue
- Indian Ocean Rim Association
- G20
- Cultural Relations
- Diaspora: The Indian diaspora in Australia is approximately 700,000 people.
- Exchange of Services: Regular flow of students, tourists, and skilled professionals.
- New Colombo Plan: 900 Australian graduates completed internships in India between 2015-2016.
Importance/Benefits
- Economic
- Energy Security: Australia is a vital source for India’s coal and uranium needs.
- Make in India Products: Australia is a promising market for Indian products, potentially replacing Chinese imports.
- Tourism: Increased Australian tourism to India, partly due to popular events like IPL.
- Market Access: India can capitalize on trade conflicts between China and Australia.
- Skill Development: Australia is well-equipped to aid India in education and knowledge sharing.
- Australia’s India Economic Strategy 2035: Aims to make India one of Australia’s top three export markets.
- Mining Sector: Australia can assist in modernizing India’s mining industry.
- Strategic
- Open Trade Regimes: Both nations support a free, open Indo-Pacific region.
- Containing China: Australia plays a critical role in QUAD efforts to counter China.
- Multilateral Support: Includes Australian backing for India’s permanent seat in the UNSC.
- Blue Dot Network: Potential for India to collaborate with Australia and other QUAD members.
- Indo-Pacific Strategy: Australia contributes significantly to India’s Pacific island strategy.
- Technical Cooperation: Both countries collaborate in high-tech and space sectors.
- Military Exercises: Australia’s recent participation in the Malabar Exercise shows strong defense ties.
- Indian Ocean Region: Australia and India collaborate on security in the region.
Concerns
- Trade Deficit: India faces a trade deficit with Australia, around AUD $15 billion.
- FDI: Australia’s FDI in India is below its potential.
- Chinese Influence: China’s presence is a strategic concern in the region.
- China controls approximately one-fourth of Australian trade, impacting Australia’s economy and political landscape.
- China’s political influence in Australia is significant, affecting domestic and foreign policies.
- Stalled Talks: Delays after nine rounds of negotiations in the Comprehensive Economic Cooperation Agreement (CECA) have hampered trade potential between India and Australia.
- Racial Attacks: Indian students and members of the Indian cricket team have faced racial attacks in Australia, straining relations.
- Exclusion from RCEP: India’s decision not to join the Regional Comprehensive Economic Partnership (RCEP) limits its market access in Australia.
- Environmental Concerns: The Indian company Adani has faced accusations of violating environmental norms in the mining sector in Australia.
Quote
- “Strategic cooperation between India and Australia can contribute to the construction of a stable maritime order in the region.” — C. Raja Mohan
India and Australia are emerging as critical partners in countering China’s assertiveness in the Indo-Pacific, emphasizing an “Open and Free” maritime order. However, both countries need to address pending trade and diplomatic issues to strengthen and diversify their relationship.