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From cricket & trade to strategic allies — the 14-year switch in India-Australia relationship

Bilateral ties started to evolve as Australia’s relationship with China began deteriorating, after a period of steady economic relations between Beijing and Canberra.

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New Delhi: In 2007, Australia participated in the Malabar Naval Exercise — the annual maritime exercise between the Indian and US navies — prompting China to lodge a formal objection. India stopped inviting Australia to the exercise after that.

In 2020, Australia rejoined the exercise. 

On Friday, the navies of India, Australia, the US, as well as that of Japan — the four Quad partners — completed the second phase of this year’s exercise.

It was an illustration of the paradigm shift in India-Australia bilateral ties over the past decade — from being apprehensive of each other due to growing ties between Canberra and Beijing, to now being partners in Quad.

India and Australia have gotten closer strategically — and in an effort to counter China at that.

As the Covid-19 pandemic was raging globally last year, New Delhi and Canberra upgraded ties to the level of Comprehensive Strategic Partnership, and signed a defence pact, the Mutual Logistics Support Agreement (MLSA).

This was also an indication of the growing bonhomie between Prime Minister Narendra Modi and his Australian counterpart Scott Morrison.

This deeper strategic turn, much to China’s displeasure, came after India and Australia signed the civil nuclear deal in 2014 — under Prime Minister Narendra Modi and their ex-PM Tony Abbott. The two sides then came closer politically as well, diplomatic sources told ThePrint.

The 2014 deal was the culmination of a prior understanding from 2011 when Australia’s former Prime Minister Julia Gillard decided to lift the ban on uranium supplies to India, a major milestone under former PM Manmohan Singh.

Before that, India and Australia mostly saw each other from the economic lens — even though a trade deal has been stuck for years — ignoring the strategic possibilities.

For a decade or more, the political, strategic and economic relations between the two nations have been below potential. The hint that things would start to change in the Australia-India relationship shone through during PM Modi’s visit to Australia in 2014,” said Lisa Singh, the chief executive of Australia India Institute, a Melbourne-based research centre on India.

Singh, a former Australian Senator, said the two countries have a “range of commonalities, but they have come so much closer on a range of geo-strategic touchpoints most recently”.

“Both countries are much more aligned today in how they see the world compared to the time of India’s Independence 75 years ago when they were both on opposite sides of the power blocs during the Cold War,” she said.

Also read: Why India could gain ‘major leverage’ as Australia, UK, US join hands to take on China

Rapid deterioration in Australia-China ties

The bilateral ties started to evolve as Australia’s relationship with China began deteriorating, after a period of steady and growing economic relations between Beijing and Canberra.

Both sides had signed the China-Australia Free Trade Agreement in 2015. However, concerns over China’s 5G technology and potential security threats started to weigh on the ties.

With the onset of the pandemic, Australia in May 2020 led calls for an investigation, by way of a resolution aimed at finding the origin of the virus, with the fingers pointed firmly at China. It was also backed by India along with other countries, much to Beijing’s anger.

“China is the most critical factor in pushing the relationship between India and Australia towards what we are seeing now. It’s not that New Delhi and Canberra suddenly realised that they wanted to work together in technology or defence or other critical areas. It was China that has changed the tone and tenor of this particular relationship,” said Rajeshwari Pillai Rajagopalan, Director, Centre for Security, Strategy and Technology at the think tank Observer Research Foundation.

Another binding factor was the US push for the Indo-Pacific strategic framework as tensions between Washington and Beijing witnessed an unprecedented rise.

In July 2020, Australia hiked its defence budget by about 40 per cent as it rolled out its Defence Strategic Update — an outcome of China’s rise and growing tensions over its territorial claims in the Indo-Pacific region.

At the same time, India and China also got engaged in a bitter border standoff along the Line of Actual Control, which acted as a catalyst for the growth of ties between New Delhi and Canberra. 

“There are common concerns over the ever-changing geopolitical environment and the need to safeguard national interests. The border clashes last year have heightened India’s focus with Sino-Indian relations falling to a decade low,” added Singh.

Also read: ‘Australia, India don’t want to constrain China’: PM Morrison says Beijing can be Quad ‘partner’

Beyond cricket and democracy

India and Australia have been close to each other due to their shared love of cricket, or being modern democracies, but it is only over the last decade that these countries have made an effort to realise their full strategic potential.

In 2008, former Australian foreign minister Stephen Smith had remarked: “It is under-appreciated that Perth and Chennai are closer to each other than Sydney is to Seoul, to Shanghai, or to Tokyo.”

A year later, during former Australian PM Kevin Rudd’s visit, both sides agreed to take the relationship to the level of a strategic partnership.

“There are a range of contemporary strategic and economic factors at play today between both Australia and India that were perhaps not there half a century ago,” Singh said.

“We are two countries with shared interests beyond cricket and democracy. We have articulated our mutual support for an open, free and international rules-based Indo-Pacific. One that addresses common security challenges such as terrorism and non-traditional security threats such as climate change, critical technologies and of course, China’s rise.”

Bilateral and multilateral military exercises AUSINDEX, Exercise Pitch and Malabar Naval Exercise, among others have also increased four-fold in the past six years. On Friday, the phase II of the Malabar exercise was concluded in the Bay of Bengal. The first phase took place in the Philippine Sea from 26-29 August.

Last month, both sides held their inaugural 2+2 format talks that sought to implement the MLSA.

Over the past few weeks, Australia has run into a row for signing a multi-billion-dollar deal with the US and the UK to build nuclear-powered submarines under a trilateral partnership also called AUKUS, but experts believe this will augur well for India-Australia ties.

“AUKUS will have a positive net benefit for India as its close partner countries will help preserve the balance of power in the region,” said Singh.

Trade talks

However, despite growth in the defence and security ties, particularly since the Morrison government came to power in 2018, the much touted India-Australia Comprehensive Economic Cooperation Agreement (CECA) has not been concluded.

Talks on CECA, which began in 2011, have been stuck owing to stiff resistance on both sides to accord more market access to each other on a range of tariff lines, especially agricultural and dairy products.

Both sides believe an interim deal will be signed by December this year, followed by the final CECA in 2022.

“China has facilitated a lot of movement on the India and Australia trade front also, given that the Chinese market has been cut down for Australian wine, beef, barley and many such items. Now, because of the closer strategic partnership between India and Australia, both will be willing to make adjustments in the trade talks,” Pillai added.

In 2020, India was Australia’s seventh-largest trading partner and sixth-largest export market. Two-way trade touched $17 billion last year.

(Edited by Amit Upadhyaya)

Also read: India & Australia vow free trade agreement by 2022, interim deal by Christmas


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