Future of Australia-India Relations


Patrick Suckling DFAT HOM Official Portrait 4 December 2012By Sergei DeSilva-Ranasinghe

In today’s context, Australia-India relations have reached a new and unprecedented milestone. Australia’s Ambassador to India, Patrick Suckling, provided an exclusive insight to Sergei DeSilva-Ranasinghe about the development and scale of modern bilateral relations, challenges in the relationship, cooperation in combating people smuggling, development of a strategic partnership, the implications of Australia’s role in the UN Security Council for South Asia, Australia’s growing interest in the Indian Ocean, the importance of regional multilateral organisations and what the future holds for the bilateral relationship.

I would like to start by getting a sense of how Australia views the relationship with India today?

As you know the Government recently released three significant documents: The White Paper on the Asian Century, The National Security Strategy, and the Defence White Paper. Those documents give you a very good sense of where Australia views India now. India’s influence in commerce has definitely grown in recent years off the back of its economic growth, but its strategic reach has also been important and its interest in East Asia and the Indian Ocean. These documents recognise that India is at the forefront of our relationships in the region, alongside China, Indonesia, Japan, South Korea and the United States. The relationship with India is growing strongly. The white papers are a reflection of the Australian Government’s commitment to strengthening and diversifying our relationship – not only in terms of economic cooperation, but also on strategic security cooperation.

The scale of the relationship, especially over the last ten years, has become very significant. This is why both countries agreed to elevate the relationship to a strategic partnershipin 2009. That was built on quite significantly during former Prime Minister Gillard’s visit to India in October last year [2012], including an agreement that the Prime Ministers would meet annually. The economic relationship is based on a genuinely strategic element, which is resource security. India sees Australia as a secure, long-term supplier of its energy needs, which is the way Northeast Asian economies have viewed Australia for decades. Whether it’s coal, LNG, copper or gold, there’s a significant trade in those sorts of resources. India is currently our tenth largest trading partner and fifth largest destination for Australian exports in goods and services. However, India is now looking at Australia in a way that it didn’t in the past; in terms of providing significant input into its continued development and prosperity. All of our major banks are now in India, we have major construction companies working with India and we have all sorts of providers from agribusiness to education, legal services to architecture and urban planning and design services operating there.

We have got a very good set of bilateral forums where we can discuss a whole range of issues. For example, coming out of the Prime Minister’s visit to India last year [2012], therewas an agreement for an annual PM to PM meeting. Now that will sit on the top of all the other frameworks where ministerial dialogues will now feed up into an annual PM to PM level agenda. It will drive the whole relationship, with a range of bilateral mechanisms – such as Foreign Minister meetings, annual Trade Minister meetings and regular Defence Minister meetings. We have ministerial dialogues on energy, security, education and skills. We have a CEO forum where top CEOs from India and Australia get together and discuss matters of mutual interest where they can drive the relationship further. So if you put all of those things together, we have a very significant suite of arrangements where ministers can, on an annual basis, talk about things that are of most importance to us and then feed them up to a Prime Minister-led process. In terms of where we’re looking down the road, what we’d like to see is, in the context of the PM to PM meetings, how far and fast we can drive the relationship through these ministerial level-led dialogues.

Bilateral trade and investment is around 20 billion. Last year alone India put 10 billion dollars into Australia. Two-way trade last year was about 17.4 billion dollars. About 15 billion of that was Australia into India and the remainder was India into Australia. We expect those figures to continue to grow. If you look at India’s coal requirements over the next few years, the projections are that their import requirements will go from 100 billion tons to around 200 billion. If you look at LNG they’re going to go from 15 million tons to 30 million tons in the next few years and then 50 million tonnes by 2025. There is also increasing interest from India into Australia. For example, last year over 10 billion dollars was invested by Indian companies into our resources sector. All of India’s major IT firms are active in Australia, with upwards of 2,000 employees each. They’re looking at niche manufacturing areas such as aircraft, fertilizers and chemicals. We’re trying to negotiate further and more comprehensive economic partnership arrangements so that we can continue to diversify and strengthen the relationship. READ MORE