INDIA AUSTRALIA RELATIONS



Published on 27 Jan 2025

The India-Australia bilateral relationship is underpinned by shared values of pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement and increasing high level interaction. The longstanding people-to-people ties, ever increasing Indian students coming to Australia for higher education, growing tourism, and sporting links, especially Cricket and Hockey, have played a significant role in further strengthening bilateral relations between the two countries.

Areas of Cooperation

     Geopolitical

      Multilateral Ties: India and Australia are both part of various international groups, such as the Quad, Commonwealth, IORA, and have engaged in the East Asia Summits.

      UN Security Council Support: Australia backs India's UN Security Council expansion bid.

      Economic Collaboration: Australia plays a role in APEC and supports India's membership.

      China Factor: India, like Australia, has faced tensions with China due to analogous issues, including concerns about national security like banning Huawei from 5G networks.

o   Example: Both countries have also called for a transparent inquiry into the origins of COVID-19 and raised objections against human rights abuses in regions like Xinjiang and Hong Kong.

     Political

      Historical Milestones: The relationship's strategic importance grew with the Australia-India Civil Nuclear Agreement and Prime Minister Modi's 2014 visit.

o   Example: In 2020, both nations elevated their partnership to a Comprehensive Strategic Partnership.

      Common interest: Both nations share similar interest in terms of national interest, security etc.

o   Example: India and Australia jointly seek a rule-based Indo-Pacific and support open seas.

     Security

      Defense Agreements: Both nations have signed agreement for military and security cooperation.

o   Example: The Mutual Logistics Support Agreement (MLSA) enhances logistics access and joint exercises. The first India-Australia 2+2 Ministerial Dialogue occurred in September 2021.

      Joint Drills: Both countries conduct bilateral and multilateral military exercises,

o   Example: AUSINDEX and Malabar Exercise.

      Maritime Security: A maritime cooperation agreement focusing on Maritime Domain Awareness is in progress.

o   Example: Australia posted a Liaison Officer at India's IFC-IOR in Gurugram.

     Economic

      Bilateral Trade Volume: Bilateral trade in goods and services between the two countries reached USD 27.5 billion in 2021.

o   Example: Australia is India's 17th largest trading partner, while India is Australia's 9th largest partner in terms of trade.

      Key Exports and Imports: India's primary exports to Australia include refined petroleum and medicaments, while major imports consist of coal, copper ores, gold, and education-related services.

      Investment in Minerals: India and Australia have committed to jointly invest in exploring lithium and cobalt mines in Australia, essential for India's electric vehicle plans.

      CEO Forum: The India-Australia CEO Forum, established in 2011, serves as a platform for businesses from both nations to discuss ways to enhance the trade and investment relationship.

      Supply Chain Diversification: Both countries aim to collaborate to diversify supply chains for critical health, technology, and other goods and services.

o   Example:  They welcomed the launch of the Supply Chain Resilience Initiative

     Science

      Research: The Australia-India Strategic Research Fund, initiated in 2006, facilitates research partnerships between Indian and Australian scientists, promoting innovative research.

      Environmental Partnership: Australia is engaged in India's Clean Ganga Project, focusing on improving the Ganges River's environmental conditions, as agreed during the visit of India's Prime Minister.

     Social

      People-to-People Ties: India is a major source of skilled immigrants for Australia.

o   Example: With roughly 976,000 individuals of Indian origin, based on the 2021 Census, constituting the second-largest group of foreign-born residents in Australia.

India-Australia Economic Cooperation and Trade Agreement (IA-ECTA)

 

This agreement is the third of its kind for India with an OECD country, after Japan and South Korea. It is expected to boost bilateral trade to USD 45-50 billion over five years, generating over one million jobs in India. It will also change perceptions about India's trade policies.

     Tariff Reductions: The agreement grants zero-duty access for 96% of India's exports to Australia and 85% of Australia's exports to the Indian market, with phased concessions for the rest. It significantly reduces India's 150% duty on Australian wines over ten years.

     Industry Benefits: India's labor-intensive sectors like textiles, gems and jewelry, leather, and footwear gain from duty-free access. Australia's raw material exports will make Indian industries more competitive, particularly in sectors like steel, aluminum, and engineering.

     Visa and Education: The agreement includes extended post-study work visas for Indian STEM graduates and a program for young Indians to pursue working holidays in Australia.

     Future Negotiations: The two countries plan to negotiate a Comprehensive Economic Cooperation Agreement (CECA) to further deepen economic ties.

 

 

Challenges in India-Australia Relations

     Violence against Indian Diaspora: Incidents of attacks on the Indian Diaspora and temples by Khalistan supporters have posed security issues and strained the relationship.

     Adani Coal Mine Dispute: Controversy surrounding the Adani coal mine project in Australia, including protests by activists, has strained bilateral ties.

     Visa Issues: Concerns about visa restrictions affecting Indian students and professionals seeking opportunities in Australia have emerged as a challenge.

Way Forward

     Investment Protection: Consider integrating investment protection provisions within the Comprehensive Economic Cooperation Agreement (CECA) to bolster the trade agreement.

     Addressing Market Challenges: Acknowledge market challenges in Australia, including intense competition due to various operational FTAs, and focus on enhancing India's competitiveness.

     APEC Membership Pursuit: Actively seek membership in the Asia-Pacific Economic Cooperation (APEC) to bolster India's role in global governance.

PM Modi described the relationship between India and Australia by various acronyms namely 3 Cs- commonwealth, cricket, and curry, 3 Ds- diaspora, democracy, and dosti, and 3 Es- economy, energy, and education. This partnership built on common values and shared goals in the Indo-Pacific, promises a brighter and more secure future for both nations.

Tags:
World Affairs

Keywords:
Australia Quad Malabar Exercise Mutual Logistics Support Agreement (MLSA) Australia-India Civil Nuclear Agreement

Syllabus:
General Studies Paper 2

Topics:
International Relations