Talk by Ambassador Anil Wadhwa on "Future of India-Australia Economic Cooperation"

A talk by Ambassador Anil Wadhwa, Distinguished Fellow, Vivekananda International Foundation, New Delhi, on “Future of India-Australia Economic Cooperation” was organised by the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) on 28 February 2023 at 1100h in room number 005. Ambassador Sujan R. Chinoy, Director General, MP-IDSA, who chaired the session, began the proceedings by briefly explaining the topic. He said that India-Australia relations were stunted for many years and revolved around cricket, commonwealth and curry. However, relations recently improved with India and Australia forging the Comprehensive Strategic Partnership. The development of the Indo-Pacific construct also brought the two countries closer. The New Education Policy was likely to draw Australian universities to India. There has been positive movement in economic relations between the two countries in light of the India-Australia Economic Cooperation and Trade Agreement (INDAUS ECTA). Although there have been Indian investments in Australia, there exist some issues regarding the same. Commenting briefly about Australia-China relations, Ambassador Chinoy observed that there was a fractured view of the rise of Beijing in different parts of Australia, based on economic and security considerations. Setting an apt background for the speakern the Chair invited Ambassador Wadhwa to deliver the talk.

Ambassador Wadhwa started by talking about geopolitical events during and post-COVID-19 years. He spoke about aggressive Chinese actions vis-à-vis Australia in the aftermath of the Australian demand for an enquiry into the origins of COVID-19. Canberra felt let down due to the Chinese ban on Australian imports. Shipments of coal kept waiting at the ports. The big businesses involved in China felt the need to diversify to reduce dependency on Beijing. Through all these years, India-Australia relations were improving. The two countries elevated their ties to the Comprehensive Strategic Partnership in 2020. Prime Minister Narendra Modi promised Australia that India would be involved in that country’s economy. The speaker mentioned a report titled ‘An India Economic Strategy to 2035’ by Mr. Peter Varghese that focused on ten economic sectors and was limited to ten states of India. He informed the audience that the reciprocal report titled ‘Australia Economic Strategy’ (AES) authored by the speaker looked at 12 economic sectors of Australia, including futuristic areas and was not restricted to any of the provinces in that country. Further, he spoke about the Australia-India Economic Cooperation and Trade Agreement (ECTA), signed in April 2022 and that entered into force in December 2022.

The author of the AES spoke enthusiastically about the growing Indian diaspora in Australia. He stated that the diaspora was hard-working and controlled several boardrooms in Australia. They could act as a bridge between the two countries. Further, he highlighted the high-level exchange of visits from the two sides, including the PMs and ministers. Ambassador Wadhwa pointed out a number of bilateral initiatives that have been kicked off between the two countries. It included an Australia-India Centre of Excellence for Critical and Emerging Technology Policy; a diaspora mapping report titled “Australia’s Indian Diaspora: A National Asset - Mapping the Community’s Reach into the Australia-India Economic Relationship” Critical Minerals Investment Partnership; Future Skills Initiative; Green Steel Partnership; New and Renewable Energy Partnership; and a vast number of collaborations in diverse fields such as e-mobility, rare earth material, strategic reserve funds, science, green partnership, and infrastructure forum, among others. On the military front, he mentioned mutual logistics agreement and the four-country Malabar naval exercise as examples of substantial engagement.

Talking about INDAUS ECTA, the speaker enlightened the audience about the benefits of the deal, which gives duty-free access to goods from each country to the other. Indian companies have benefitted by investing in Australian coal. The pact has made the movement of students easier. Also, service providers such as Yoga teachers and chefs have benefitted. He said that the Albanese Government increased the quota for trained manpower. There was ample opportunity in fields of nursing, carpentry, masonry, and perimeter security, among others. Progress has been made in the research collaboration. The Mechanism for the Mutual Recognition of Qualifications has increased employability. Ambassador Wadhwa stated that Australia has immense Liquified Natural Gas (LNG) export potential that might replace countries from West Asia for India’s energy needs. By 2035, India will likely become one of Australia’s important export markets, and Australian investments in India will also likely see an uptick. The speaker said the country had kept aside billions of dollars for the commercial mining of critical minerals and the space industry, among others.

Further, Ambassador Wadhwa spoke about the Australian University campuses being set up in India. He said such universities are essential from the perspective of the Indian market. The speaker explained that the ECTA neutralised some of the disadvantages of not being part of the Regional Comprehensive Economic Partnership (RCEP) or the Trans-Pacific Partnership (TPP). He said that Australia was a small market. Therefore, there was a limit to the trade. Commodities such as minerals would be very important in the future, since the country contains some of the essential critical minerals. Australia has substantial pension funds of trillions of dollars, and India’s Production Linked Incentive (PLI) scheme was attracting Australian investment. Regarding the Australia-India Comprehensive Economic Cooperation Agreement (AI-CECA), the speaker said that it could be a bench setter for other Free Trade Agreements India is negotiating with other nations. However, the Australian dairy industry has been kept out of the negotiations. Indian agriculture has much to learn from Australia regarding the use of technology to manage agriculture efficiently.

Ambassador Wadhwa listed a number of areas of bilateral cooperation mentioned in the AES that included commodities (critical minerals like lithium, mine safety, manufacturing of mining equipment); LNG exports; construction of warships, support ships, corvettes; textile and textile design; groundwater management solutions and recycling of water; Education (training the trainers programme); space technology; collaboration in e-learning; grid technology (remotely controlled grid stabilisation); healthcare; farm and dairy production (food processing units); fintech (cloud and other technology); tourism; infrastructure development; and automobile spare components.

Following the talk, the Chair observed that India-Australia relations had come a long way in the last decade. There existed synergies with India. However, China has made exceptional inroads in Australia. There are vast numbers of Chinese students. China is buying land parcels in the country. But after trade tensions with Beijing, Australia was trying to diversify relations. Ambassador Chinoy agreed with the speaker that India had an opportunity in the automobile, Information Technology, Micro, Small & Medium Enterprises, and defence sectors. The Chair also saw the opportunity for bilateral cooperation in third countries, especially the Pacific Islands. He opined that the ECTA was a good initiative for the two countries. However, he also flagged the irritants in the relationship, such as the problem of illegal immigration and attacks by Khalistani supporters on temples.

In the ensuing question and answer session, Ambassador Wadhwa said there was distrust regarding Indian companies in Australia in the past. But now, Indian companies get contracts for various projects. Regarding Uranium export, the speaker said that India does not require uranium from Australia, and the Non-proliferation Treaty is an emotive issue in Canberra. Australia has limited capacity to go beyond Sri Lanka and participate in African affairs. Chinese media has a strong influence on media and academia. India should learn sports stadium management from Australia. The Australia-United Kingdom-United States (AUKUS) pact was designed to counter China in the Pacific.

Report was prepared by Mr. Niranjan Oak, Reasearch Analyst, Nuclear and Arms Control Centre.