Context: Prime Minister Narendra Modi’s visit to Australia. The visit which was originally planned for a multilateral event, the meeting of the Quad, it transformed into a purely bilateral visit after the U.S. President pulled out over domestic political constraints; Japanese Prime Minister Fumio Kishida followed suit, and a shortened Quad Summit was held in Hiroshima. As a result, PM visit to Australia was much more in the spotlight.
It needs to be highlighted that that purpose of such visits is conducive to strengthening the common understanding between both countries, or in the best interests of the “three D’s” i.e.— Democracy, Diaspora and Dosti [Friendship] as earlier reiterated by PM Modi.
During the recent visit the discussions focused in multiple areas with areas covering like that of cooperation in defence and security, trade and investment, new and renewable energy, green hydrogen, critical minerals, education, migration and mobility and people to people ties
- Institutionalisation of India-Australia Summit: India & Australia has upgraded their relationship to Annual bilateral summits at the highest political level in 2023. A Consulate General of India in Brisbane was also established highlighting the growing trust, convergence of interests among the two middle powers.
India & Australia have already raised their relationship status to India-Australia Comprehensive Strategic Partnership level.
- Strategic aspect of relations: The leaders also reiterated their determination to ensure a peaceful, prosperous and inclusive Indo-Pacific region, underpinned by a rules-based international order. They also discussed reform of UN Security Council.
Australian leader also expressed strong support to India’s G20 Presidency and initiatives.
- Economic aspect of relations: Australia has a large number of expatriate Indians to contribute to its economy. Also, it is a place where large number of Indian students go for higher education and employment. In this respect, the signing of India-Australia Migration & Mobility Partnership Agreement will further facilitate mobility of students, professionals, researchers, academics. This will be done through a new skilled pathway named MATES (Mobility Arrangement for Talented Early Professionals Scheme) specifically created for India.
- A Business Roundtable with CEOs of top Australian companies was also organised, and the business leaders were invited to invest in India in areas particularly including that of digital infrastructure, IT, fintech, telecom, semiconductors, space, renewable energy including green hydrogen, education, pharma, healthcare including medical devices manufacturing, mining including critical minerals, textile, agriculture & food processing.
- Partnership in emerging technologies: The two countries have also finalized Terms of Reference of the India-Australia Hydrogen Task Force, to focus on deployment of clean hydrogen, fuel cells etc highlighting the cooperation in areas beyond traditional spheres of diplomacy.
However despite of the increasing cooperation between the two countries there are still deep challenges that exist between two countries
Challenges in India-Australia Ties
- Dichotomous Australian foreign policy: There is some misalignment in Australia’s economic and political interests. Though Australia has been actively engaging with India and US as part of QUAD grouping, its economy still depends on China owing to its huge share in bilateral trade and investment.
- Lingering CECA: Comprehensive Economic Cooperation Agreement (CECA) has not yet materialised though the negotiation started in 2011. This is a hindrance to the bilateral trade.
- Withdrawal from RCEP: One reasons for India’s withdrawal from RCEP was objection from farmer organisations and diary cooperatives due to fears of flooding of cheaper agricultural and dairy products from Australia.
- Challenges in Indian economy: Australia feels India is too complicated for its growth story to be linear and has scepticism about India’s economic progress, which is constrained by political compromise, burdened by interfering bureaucracy , dented by corruption and shaped by a political tradition which puts greater faith in government intervention than the efficiency of market.