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India and Australia From Divergence To Convergence

Context

  • The fifth round of Track 1.5 Australia-India Leadership Dialogue will take place on September 6, 2022 in New Delhi, bringing together 50 of Australia’s and India’s best and brightest leaders, including Ministers, business leaders, and academics, for an invitation-only forum.
  • Addressing Australia-India bilateral relations in the context of the Indo-Pacific region, the Dialogue provides a forum for consensus-building, paving the way for agreements on formal outcomes.

Relevance

GS Paper – 2 International Treaties & Agreements, Government Policies & Interventions, Groupings & Agreements Involving India and/or Affecting India’s Interests

Mains Question

Discuss the significance of the India-Australia Economic Cooperation and Trade Agreement (ECTA) from an Indo-Pacific perspective. (250 Words)


Creating tie markers

  • About the Australia-India Leadership Dialogue: The Australia-India Leadership Dialogue is a premier forum for informal diplomacy between Australia and India. Due to the novel coronavirus pandemic, this is the first Dialogue since 2019.
  • Goal: It aims to improve our shared framework for regional security, promote business and commercial opportunities, and strengthen people-to-people connections, both bilaterally and multilaterally, thereby contributing to solutions to global challenges.
  • Topics to be discussed include cyber threats and artificial intelligence (AI) governance in a geopolitically volatile region.
    • Decarbonizing economies and assisting one another in developing trustworthy supply chains through critical minerals cooperation.
    • India’s tech talent is assisting Australia in filling skills gaps through migration.
  • Evolved focus: The high-level sessions will cover evolving security architecture, Digi-health and Med-tech, Clean-tech, sustainability, and global tech talent.
  • Importance of the Leadership Dialogue: The dialogue emphasised the importance of personal and collective communication in a shared physical space in an era when technology and the cyber world portray face-to-face conversations as obsolete.

The significance of India to Australia

  • Australia wants to diversify its supply chains for critical minerals and find alternative markets to China.
  • Australia also has reserves of approximately 21 of the 49 minerals listed in India’s critical minerals strategy. It is well positioned to serve India’s national interests in carbon reduction.

Relationship Overview

  • Mutual interests: Aside from being two English-speaking, multicultural, federal democracies that believe in and respect the rule of law, both have a strategic interest in maintaining balance in the Indo-Pacific and ensuring that no single hegemonic power dominates the region.
    • Furthermore, Indians are now the largest source of skilled migrants in Australia, and the already robust economic relationship could be transformed if the promise of the new Australia-India Economic Cooperation and Trade Agreement (ECTA) is realised.
  • Disagreements: The Cold War’s long shadow, India’s independent economic policies, the White Australia policy, Canberra’s decision not to transfer uranium to India, and other factors had kept the two countries apart for decades.
    • White Australia policy: The Act empowered immigration officers to force any non-European migrant to take a 50-word dictation test. Beginning in 1901, it was intended to prohibit people of non-European ethnic origin, particularly Asians, from immigrating to Australia.

Prior collaboration agreements

  • Economic Cooperation And Trade Agreement: In 2022, India and Australia signed a historic interim Economic Cooperation And Trade Agreement (INDAUS ECTA) that will provide zero-duty access to 96% of India’s exports to Australia and approximately 85% of Australia’s exports to India.
    • India will benefit from Australia’s preferential market access on 100% of its tariff lines.
    • India will grant Australia preferential access to over 70% of its tariff lines.
  • Trade and Investment: Australia is India’s eighth largest trading partner, and India is Australia’s fifth.
  • Strategic Dialogue: In June 2020, Australia and India agreed to elevate their Secretaries 2+2 dialogue (Defense and Foreign Affairs) to the Ministerial level and form a Comprehensive Strategic Partnership.
  • Mutual Logistic Support Agreement (MLSA): Australia and India signed the MLSA in 2020, allowing for more sophisticated operational cooperation, more complex military engagement, and greater combined response to regional humanitarian disasters.
  • Defence Science and Technology Implementing Arrangement (DSTIA): This arrangement facilitates interaction among our defence research organisations.

Collaboration in multilateral fora

  • Australia backs India’s bid for a seat on an expanded United Nations Security Council.
  • India and Australia are both members of the G-20, the Commonwealth, the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), the ASEAN Regional Forum, the Asia Pacific Partnership on Climate and Clean Development, and have attended East Asia Summits.
  • Both countries have also been cooperating as members of the WTO’s Five Interested Parties (FIP).
    • The Five Interested Parties were a group of countries chosen to break the initial deadlocks, consisting of key political and economic players in the world of trade, namely the United States, European Union, Australia, Brazil, and India
  • Australia is a key member of the Asia-Pacific Economic Cooperation (APEC) and supports India’s membership in the organisation.
  • Australia joined SAARC as an observer in 2008.
  • Australia took part in the MALABAR naval exercise in October 2020, joining India, the US, and Japan in demonstrating a shared commitment to an open and prosperous Indo-Pacific.

A common framework As India celebrates its 75th anniversary of independence and overtakes the United Kingdom as the world’s fifth largest economy, the momentum surrounding the fifth Australia-India Leadership Dialogue and the bilateral fruit it may bear should not be underestimated.


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