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India-Australia relations: Building new bridges for exclusive trade – IMPRI Impact and Policy Research Institute

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India-Australia relations: Building new bridges for exclusive trade - IMPRI Impact and Policy Research Institute

Harsh V Pant

It is India’s engagement with Australia that stands out for the speed with which the two nations have been able to transform their bilateral engagement.

Indian foreign policy has been geared toward setting up strong partnerships in recent years. From a nation that was diffident about getting together with like minded partners, New Delhi today is demonstrating its commitment in forging ties with those nations with whom it feels politically in sync. Trust based partnerships are re-defining the global landscape today and India is moving ahead with a degree of seriousness not seen in recent history as it configures its global posture as a leading power in the international system. This is particularly true of the Indo-Pacific where old partnerships have been resurrected and new ones have been crafted at a time of significant flux in the regional order.

It is India’s engagement with Australia that stands out for the speed with which the two nations have been able to transform their bilateral engagement. This week Australian Prime Minister Anthony Albanese will be in India celebrating not only the festival of Holi but also the vibrancy of a partnership that till a few years ago was struggling to reach its full potential.

But a succession of leaders in Australia and India have ensured a spectacular shift in the tone and substance of New Delhi-Canberra engagement. This – the first by an Australian Prime Minister to India since 2017 – will also be Albanese’s first visit to India as Prime Minister though he has met with his Indian counterpart a few times already.

Trust based partnerships are re-defining the global landscape today and India is moving ahead with a degree of seriousness not seen in recent history as it configures its global posture as a leading power in the international system.

During the Cold War, India and Australia stood on opposite ideological poles. Lack of trade relations and preoccupation with their respective neighborhoods prevented the two from exploring the potential of their own relationship. As the Cold War thawed, India and Australia began engaging with each other even as many in India continues to perceive Australia as a US “stooge.” Australia’s vacillation over uranium sales to India in 2007 added to the already existing mistrust between two countries.

Australia came on board in 2011 after India signed a nuclear deal with the US, underscoring for many in New Delhi the non-independent nature of its foreign policy decision-making. Since then, bilateral relations between the two nations have seen an exponential growth and today they are far more substantive closer than they have been at any time in history. Yet this extraordinary comfort level is striking given how distant the two nations had seemed just about a decade back.

The strategic partnership between the two countries was elevated to a Comprehensive Strategic Partnership in June 2020 and the India-Australia Economic Cooperation and Trade Agreement (ECTA) came into force on December 29, 2022. This pact is a result of growing political trust between the two sides with India benefitting from preferential market access provided by Australia on 100 per cent of its tariff lines and offering preferential access to Australia on over 70 per cent of its tariff lines.

The Australian Prime Minister will be leading a big business delegation to India as Canberra seeks to diversify its trade and investment partners, rather than putting all its eggs in the Chinese basket. China’s ties with Canberra remain testy despite recent attempts at re-engagement. India is Australia’s sixth largest trading partner and there is an ambition on both sides to upscale this engagement as Canberra continues to struggle with China’s imposition of trade blockages on a rage of Australian exports.

Diversification is also the buzzword when it comes to Australia’s supplies of critical minerals despite China being one of the largest recipients. Canberra is aiming to remain a “trusted and reliable supplier” to key trading partners such as India, Japan and the Republic of Korea.

India is Australia’s sixth largest trading partner and there is an ambition on both sides to upscale this engagement as Canberra continues to struggle with China’s imposition of trade blockages on a rage of Australian exports.

At the regional level, the two nations have sought to come together based on their shared threat perception and common values by forming an Indo-Pacific coalition of like-minded countries. The Quad has a new energy today that is hoping to offer a robust alternative to nations in search of one to get out of the China trap.

Security and defence cooperation between New Delhi and Canberra is increasingly aimed at upholding freedom of navigation and creating a “strategic equilibrium” in the Indo-Pacific maritime space peaceful resolution of disputes, democratic values, and territorial integrity. After all, they are both beneficiaries of the free and open Indo-Pacific region that respects a rules-based order in consonance with international law.

In recent years, the two have become more concerned about the stability of the region’s maritime order on account of the hostile attitude of some countries with stakes in the Indo-Pacific. Just as without Chinese belligerence, a substantive Quad would have remained a distant dream, without a pro-active stance by India and Australia, this grouping would not have been able to move so far, so fast. In 2020, New Delhi also decided to invite Canberra to join its high-level naval exercises, which usually involve the navies of India, Japan, and the United States.

While strategic dialogue and informal cooperation has been growing between the four countries, the exercises in 2021 marked the first time Australia became part of this official joint military engagement.

The Indo-Pacific construct has allowed India and Australia to re-look take a fresh look at each other in their respective strategic outlooks. It is Australia’s broadening of its strategic horizons to include the Indian Ocean, and India’s growing imprint in the South Pacific, that has made envisioning of the Indo-Pacific a real possibility.

Despite the convergences, sustained investment will be needed to keep the momentum in the partnership. Modi will be in Australia for the Quad Leaders’ Summit and Albanese will be in India again in September for the G20 Leaders’ Summit, allowing the two sides to consolidate the gains made so far and to push for newer horizons. As India welcomes Albanese this week, “Cricket, Commonwealth and Curry” should make way for “China, Climate and Critical Tech.”

This article was first published in Observer Researcher Foundation as The Evolving Arc of New Delhi-Canberra Ties

Read more by the author: India-Italy Ties and the Indo-Pacific

About the Author


Harsh V Pant

Professor of International Relations at King’s College London and Director of Research at Observer Research Foundation (ORF), New Delhi.

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