INDIA-AUSTRALIA
Historical Background
- The India-Australia bilateral relationship has been underpinned by the shared values of pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement, and increasing high-level interaction
- Several common traits, including strong, vibrant, secular, and multicultural democracies, a free press, an independent judicial system, and English language, serve as the foundation for closer co-operation and multifaceted interaction between the two countries
- The end of the Cold War and beginning of India’s economic reforms in 1991 provided the impetus for the development of closer ties between the two nations.
- The ever-increasing numbers of Indian students travelling to Australia for higher education, and the growing tourism and sporting links, have played a significant role in strengthening bilateral relations
- With the passage of time, ties evolved in the direction of a strategic relationship, alongside the existing economic engagement
- In recent years, the relationship has charted a new trajectory of transformational growth
- With greater convergence of views on issues such as international terrorism, and a shared commitment to a rules-based order in the Indo-Pacific region, the two democracies have taken their cooperation to plurilateral formats, including the Quad (with the United States and Japan).
Strategic ties
- In September 2014, Australia’s Prime Minister Tony Abbott visited India, and in November that year, Modi became the first Indian Prime Minister to make an official visit to Australia after Rajiv Gandhi in 1986
- He also became the first Indian PM to address a joint sitting of the Parliament of Australia
- At the India-Australia Leaders’ Virtual Summit in June 2020, Modi and Prime Minister Scott Morrison elevated the bilateral relationship from the Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP)
- At the 2nd India-Australia Virtual Summit in March 2022, several key announcements were made, including on a Letter of Intent on Migration and Mobility Partnership Arrangement to foster the exchange of skills, and a Letter of Arrangement for Educational Qualifications Recognition to facilitate the mobility of students and professionals
- There has been a series of high-level engagements and exchange of ministerial visits in 2022 and in 2023
Cooperation between two Countries
Cooperation
The Economic Cooperation Trade Agreement (ECTA): the first free trade agreement signed by India with a developed country in a decade entered into force in December 2022, and has resulted in an immediate reduction of duty to zero on 96% of Indian exports to Australia in value (that is 98% of the tariff lines) and zero duty on 85% of Australia’s exports (in value) to India
Bilateral trade was US$ 27.5 billion in 2021; with ECTA, there is potential for it to reach around US$ 50 billion in five years
People to People ties
India is one of the top sources of skilled immigrants to Australia
As per the 2021 Census, around 9.76 lakh people in Australia reported their ancestry as Indian origin, making them the second largest group of overseas-born residents in Australia
To celebrate India@75, the Australian government illuminated more than 40 buildings across the country, and Prime Minister Albanese issued a personal video message
Education
The Mechanism for Mutual Recognition of Educational Qualifications (MREQ) was signed on March 2 this year
This will facilitate mobility of students between India and Australia
Deakin University and University of Wollongong are planning to open campuses in India
More than 1 lakh Indian students are pursuing higher education degrees in Australian universities, making Indian students the second largest cohort of foreign students in Australia
Defence Cooperation
The 2+2 Ministerial Dialogue was held in September 2021, and the Deputy Prime Minister and Defence Minister of Australia visited in June 2022.
The Mutual Logistics Support Agreement (MLSA) was concluded during the Virtual Summit in June 2020, and the two militaries held several joint exercises in 2022
Australia will host military operations with India, Japan, and the US in the “Malabar” exercises off the coast of Perth in August, and has invited India to join the Talisman Sabre exercises later this year
Clean Energy
The countries signed a Letter of Intent on New and Renewable Energy in February 2022 which provides for cooperation towards bringing down the cost of renewable energy technologies, especially ultra low-cost solar and clean hydrogen
During the Virtual Summit in March 2022, India announced matching funds of AUD 10 million for Pacific Island Countries under Infrastructure for Resilient Island States (IRIS) and of AUD 10 million for Pacific Island Countries under International Solar Alliance (ISA)
China Factor
Ties between Australia and China were strained after Canberra in 2018 banned Chinese telecom firm Huawei from the 5G network
Later, it called for an inquiry into the origins of Covid-19, and slammed China’s human rights record in Xinjiang and Hong Kong
China responded by imposing trade barriers on Australian exports, and by cutting off all ministerial contact
India has been facing an aggressive Chinese military along the border. New Delhi and Canberra have been assessing the Chinese challenge since 2013
What is Economic Cooperation Trade Agreement
- It is the first Free Trade Agreement (FTA) that India has signed with a major developed country in over a decade.
- The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like:
- Trade in Goods, Rules of Origin
- Trade in Services
- Technical Barriers to Trade (TBT)
- Sanitary and Phytosanitary (SPS) measures
- Dispute Settlement, Movement of Natural Persons
- Telecom, Customs Procedures
- Pharmaceutical products, and Cooperation in other Areas
- The India-Australia Economic and Cooperation Trade Agreement (Ind-Aus ECTA ), which is expected to double trade between the two countries to $50 billion, came into effect.
- The Ind-Aus ECTA provides an institutional mechanism to encourage and improve trade between the two countries
- It covers almost all the tariff lines dealt by India and Australia
- India will benefit from preferential market access provided by Australia on 100% of its tariff lines, including all the labor-intensive sectors of export interest to India, such as Gems and Jewellery, Textiles, leather, footwear, furniture among other
- On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia, which are primarily raw materials and intermediaries such as coal, mineral ores and wines
- Products like agricultural products and the dairy sector - which were very sensitive for India and without which Australia has never done an agreement before - have been protected
- It is estimated that an additional 10 lakh jobs would be created in India under ECTA
Australia’s “An India Economic Strategy to 2035”, a vision document
Australia's "An India Economic Strategy to 2035" is a comprehensive and ambitious vision document that has the potential to reshape the economic relationship between the two nations. Here's a breakdown of the report and its key aspects:
Background
- Commissioned by the Australian Government: The strategy was commissioned by the Australian Government and independently authored by former Secretary of the Department of Foreign Affairs and Trade, Peter Varghese AO.
- Released in 2018: The final report was presented in 2018, outlining a detailed roadmap for strengthening economic ties with India.
- 2022 Update: An updated report was released in 2022 to reaffirm commitment to the original vision and reflect changes in the economic and strategic environment.
Key Objectives of the Strategy
- India as a Top-Tier Partner: The strategy envisions India becoming one of Australia's top three export markets and the third-largest source of foreign investment in Asia by 2035.
- Elevating Bilateral Relationship: It seeks to elevate the Australia-India strategic partnership and deepen people-to-people ties.
- Roadmap, Not a Guarantee: The strategy provides a realistic roadmap for achieving these goals, acknowledging challenges along the way.
Ten Key Sectors
The report identifies ten sectors where Australia has a competitive advantage and where significant potential for collaboration with India exists:
- Education
- Resources
- Tourism
- Agribusiness
- Energy
- Health
- Financial Services
- Infrastructure
- Science and Innovation
- Sports
Nuclear cooperation between India- Australia
India and Australia have a history of cooperation in the nuclear field, although it's been a complex journey. Here's a breakdown of the key points:
The Road to Cooperation
- Uranium Sales Ban: Australia, as a major uranium producer, historically held a ban on uranium exports to India due to India's status as a non-signatory of the Nuclear Non-Proliferation Treaty (NPT).
- Shift in Policy: In 2011, the Australian government overturned the ban, recognizing India's growing energy needs and responsible nuclear record.
- Civil Nuclear Agreement: Australia and India signed the Civil Nuclear Cooperation Agreement in September 2014, paving the way for uranium exports to fuel India's civilian nuclear reactors under IAEA safeguards.
- First Uranium Shipment: In 2017, Australia made its first uranium shipment to India.
Key Aspects of Nuclear Cooperation
- Focus on Civilian Use: The agreement specifically focuses on the peaceful use of nuclear energy and includes strict safeguards and monitoring mechanisms by the IAEA to ensure non-proliferation.
- Commercial Opportunity for Australia: Australia sees the sale of uranium to India as a significant economic opportunity to boost its resource sector.
- Strategic Considerations: Closer nuclear cooperation is viewed as a way to strengthen the broader strategic partnership between India and Australia
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Previous Year Questions :
1.Consider the following countries: (2018 UPSC)
Which of the above are among the ‘free-trade partners’ of ASEAN? (a) 1, 2, 4 and 5 Ans: (c) |
