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The new promise of India-Australia relations

Meeting between Abbott and Modi, rooted in geo-strategy and economics, will have wider impact on stability and balance.

Last updated: 04 Sep 2014 10:30
Amitabh Mattoo

Amitabh Mattoo is the Director of the Australia India Institute and Professor of International Relations at the University of Melbourne and at Jawaharlal Nehru University, New Delhi.
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During PM Abbott’s visit, the two countries are expected to sign a path-breaking nuclear agreement [Reuters]

As the Australian Prime Minister Tony Abbott visits India for the first standalone bilateral visit (on September 4 and 5), hosted by the new Bharatiya Janata Party-led Narendra Modi government, it is becoming obvious that the relationship between the two countries is poised to transform itself.

In an Asia marked by instability and uncertainty, the new India-Australia concord - rooted in both geo-strategy as well as economics - will have wider consequences for stability and balance in the region. In November, Prime Minister Modi will visit Australia for a bilateral visit and for the G20 summit - the first time an Indian prime minister has visited Australia in 28 years. The times, as they say, are clearly changing.

Consider this. During Prime Minister Abbott's visit, the two countries are expected to sign a path-breaking agreement that will allow for the transfer of Australian uranium to India, making India the first non-Nuclear Nonproliferation Treaty signatory country to get Australian uranium.

The Australian prime minister is travelling to India with a delegation of top businessmen, who are expected to - with their Indian counterparts - chalk out a road map for collaboration in sectors as diverse as mining, agriculture and clean energy. In addition, on the table are agreements that will provide for much greater collaboration in the education sector.

Historically, the relationship between Canberra and New Delhi has been characterised by missed opportunities. The long shadow of the Cold War, India's autarkic economic policies, the white Australia policy, and Canberra's decision not to transfer uranium to India, have kept the two countries apart for several decades.

But this is now history. Today, there are few countries in the region with which Australia has as much in common, both in values and interests, as India. Apart from being two English-speaking, multicultural, federal democracies that believe in and respect the rule of law, both have a strategic interest in ensuring a balance in the Indo-Pacific and in ensuring that the region is not dominated by any one hegemonic power. In addition, Indians are today the largest source of skilled migrants in Australia.

Late last year, the Australia-India Institute at the University of Melbourne, in partnership with the Sydney-based Lowy Institute, commissioned one of the most comprehensive surveys of Indian public opinion on key foreign policy issues and critical challenges of governance. Indians ranked Australia in the top four nations towards which they feel most warmly. Only the United States, Japan and Singapore ranked more highly. Today, Indians feel warmer towards Australia than towards countries in Europe, including Britain or India's fellow so-called BRICS.

Australia-India relations improve

No less importantly, Australia is seen as a country that functions well and is worth emulating. Sixty percent of Indians think it would be better if India's government and society worked more like Australia's. Japan and Singapore rank roughly equal to Australia. Only the United States ranks better at 78 percent. Other countries, including Britain, China and Germany, do not fare as well as governance models for India.

A majority of Indians also see many good qualities in Australia and appreciate Australian values.

Relations between India and Australia have deepened dramatically over the past decade. India's economic growth and its burgeoning demand for energy, resources and education have propelled India to become one of Australia's largest export markets.

It is, however, the economic opportunities that the Modi government promises to bring that could provide the real cement to bind Australia and India closer together. Two sectors stand out: mining and higher education, including vocation educational and skills development. Both are at the centre of Modi's policy radar.

For decades, the mining sector in India has been poorly governed and badly regulated. According to a 2012 McKinsey report, India's mining sector has the potential to contribute $40bn annually to government revenue and create, directly or indirectly, an additional 2.3 million jobs. As the report points out, despite having the top five or six reserves globally in many commodities such as iron ore and thermal coal, the mining industry is small and contributes only 1.2 percent of gross domestic product. Modi has emphasised that he wants urgently to reform the mining sector.

In Australia, the end of the mining boom presents challenges in particular for the mining services sector, and it could benefit from the opening up of India's mining sector. With investment in mining falling in Australia as India's need for investment, technology and skills is growing more pressing, we could soon see Australian mining services companies replacing local demand by working in India, and India using Australian skills to unlock its mineral resources.

Similarly, reform in higher education, particularly vocational education, is vital for the Modi government as it attempts to realise the country's so-called demographic dividend from its 500 million young people aged fewer than 25. The state of the higher education sector in particular is an abiding reminder of the deadening effect of India's planned economy up until 1990, the so-called license-permit Raj, which stunted India's global ambitions.

The previous government introduced several bills to reform the sector but, with insufficient support and political will, all were stalled in parliament. The Modi government will make sure these reforms are carried out. This will present an opportunity for Australian universities, which are faced domestically with several challenges, to take advantage of the biggest market in the world.

Beyond economics, is the mutual concern in Canberra and New Delhi about security and stability in the Indo-Pacific region. Both India and Australia have deep economic relations with China, but are equally concerned about Beijing's aggressive behaviour, in the recent past, and would ideally want a region that is not dominated by any one hegemonic power. In the past Canberra has shied away from an explicit military partnership with India, Japan and the US.

This could well change in the months to come with both Modi and Abbott seen as being China sceptics , and willing to take a more candid assessment about China's rise and its consequences for the region. The Australia-India relationship is clearly an idea whose time has come, but it will require political nurturing before it acquires a momentum of its own.

Amitabh Mattoo is the Director of the Australia India Institute and Professor of International Relations at the University of Melbourne and at Jawaharlal Nehru University, New Delhi.

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The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

 

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