Australia, India seek closer ties amid shared wariness over China’s rise

Scott Morrison and Narendra Modi will hold a virtual summit on Thursday and are expected to sign a deal on reciprocal access to military bases
It comes at a time of heightened anxiety, with escalating trade tensions between Canberra and Beijing and tense India-China military stand-offs

Australia

John Power

Published: 5:00am, 4 Jun 2020

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Australian Prime Minister Scott Morrison and Indian Prime Minister Narendra Modi will seek closer ties on defence, trade and education during their first “virtual summit” on Thursday, amid growing wariness in both countries of China’s increasingly assertive foreign policy.

The two are expected to sign a deal granting reciprocal access to military bases for logistics support and agreements to develop new supply chains in key industries, such as rare earths and minerals, as well as discuss cooperation in managing the coronavirus pandemic, education and maritime resources.

Morrison is also likely to reiterate Canberra’s desire to join the annual Malabar naval exercises involving the US and Japan, which New Delhi has so far resisted out of suspected deference to Beijing.

The Australian prime minister, who cancelled his inaugural trip to India in January amid the bush fire crisis at home, said on Sunday the two “like-minded democracies and natural strategic partners” believed strong ties were key to a “more open, prosperous and inclusive Indo-Pacific” – thought to be a veiled reference to Canberra and New Delhi’s shared suspicions of Beijing’s growing maritime ambitions.

Canberra and New Delhi are thought to be suspicious of Beijing’s growing maritime ambitions. Photo: Handout / PLA Daily

The signing of the headline Mutual Logistics Support Agreement during the summit would “allow Australian and Indian ships to refuel and replenish at each other’s ports, making joint exercises or even patrols much easier”, said Ian Hall, an academic fellow at the University of Melbourne’s Australia India Institute.

“The agreement is also a bit of signalling to Beijing that the defence and security aspects of the bilateral strategic partnership are still being tightened.”

The push to boost ties comes at a time of heightened anxiety, with escalating trade tensions between Canberra and Beijing and a tense military stand-off between India and China along their disputed Himalayan border.

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Beijing earlier this month slapped an 80 per cent tariff on Australian barley and suspended imports from four Australian abattoirs, in moves widely seen as retaliation for Canberra’s push for an independent international inquiry into the origins and spread of the coronavirus.

The measures came after Chinese ambassador to the country Cheng Jingye warned of a possible boycott of Australian goods and universities, where Chinese students make up more than one in 10 enrolments and at some institutions contribute nearly one-quarter of all revenues.

China has denied charges of economic retaliation against Australian exporters, who send more than one-third of their goods to the country, insisting the trade measures came in response to quarantine and inspection violations and unfair trade practices.

Beijing recently slapped tariffs on Australian barley and suspended imports from four of the country’s abattoirs. Photo: Bloomberg

“There is a growing view in Australia of its over-dependence on China with regards to trade, tourism and above all, Chinese students,” said Purnendra Jain, a professor of Asian Studies at the University of Adelaide. “Australian universities are so dependent on Chinese students for their revenue that some of them will have to close if China decides not to send its students to Australia.”

Although Modi has been reticent to publicly address tensions, China and India have for weeks been locked in a border stand-off that has seen Chinese and Indian soldiers take part in skirmishes using their fists, rocks and clubs. Indian military sources quoted in domestic media have accused China of occupying Indian territory amid a major military build-up by both sides – an accusation Beijing has denied.

Although officially a member of the Non-Aligned Movement formed at the height of the Cold War, New Delhi has in recent years sought to strengthen partnerships with countries wary of Beijing, joining “the Quad” security dialogue with the US, Japan and Australia in 2007.

After falling into a decade-long hiatus following just one round of dialogue and joint military drills, it was revived in 2017 amid growing concerns over Beijing’s expansive claims in the South China Sea.

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“India’s relations with Australia are on the upswing and poised to grow stronger, based on a convergence of both values and interests,” said Hemant Krishan Singh, director general of the Delhi Policy Group and a former Indian ambassador to Japan, Indonesia and Colombia.

The summit should “infuse greater momentum” into efforts aimed at maintaining a “rules-based order in the Indo-Pacific” and enhance security cooperation in the Indian Ocean, Singh said.

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But even as Australia-India ties look set to “scale greater heights”, as suggested this week by Australian High Commissioner Barry O’Farrell, significant limits to their relations are likely to remain.

New Delhi, whose foreign policy for decades has shunned formal alliances, has been widely seen as hesitant to take a tough and unified line on Beijing compared to its Quad partners, two of which, Australia and Japan, are US treaty allies.

Although less wedded to the Non-Aligned Movement than in the past, India’s “restraint” and “relative caution” has been guided by its sharing the “world’s longest disputed boundary with China and military stand-offs that Australia does not have to worry about”, said Swaran Singh, a professor of diplomacy and disarmament at Jawaharlal Nehru University in New Delhi.

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For Australia, India is unlikely to offer a quick fix for lessening its heavy economic reliance on China.

While Canberra would like to see New Delhi liberalise trade further to give Australian producers greater access to the Indian market, “the signs on that front are not good, with India recently announcing a plan to enhance self-reliance”, Hall said.

“But I think Canberra is now realistic about how far the Modi government is willing to move on this, and has settled into a long game of trying to do what it can to boost trade and investment, and persuade India of the virtues of liberalisation.”

There is also the simple matter of scale. Australia’s two-way trade with India amounted to about A$30 billion (US$20.5 billion) last year, a fraction of its A$200 billion trade with China.

“India’s economy is much smaller – its economy shrank even before Covid-19 and will further deteriorate in the wake – with a similar population to that of China,” said Jain, the University of Adelaide professor, describing the country as a “tough market to negotiate”.

“And being a ‘messy democracy’ and a bureaucratic state, Australian businesses have always found it difficult to penetrate into the Indian market.”

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