India Australia Relation: 2+2 Ministerial Dialogue focus on Strengthening Strategic Ties

Context:

• This article is based on an Editorial “Quad, CECA on the agenda at India Australia 2+2 Ministerial dialogue” which was published in The Hindu. Recently, India Australia held a 2+2 Ministerial Dialogue in New Delhi.

India Australia 2+2 Ministerial Dialogue: Strengthening Strategic Partnerships in Bilateral Settings

• Defence Minister Rajnath Singh and External Affairs Minister S Jaishankar met Australian Deputy Prime Minister and Defence Minister Richard Marles and Foreign Minister Penny Wong as part of the second India Australia 2+2 Ministerial Dialogue.
• What are Ministerial Dialogue meetings about?
• • The 2 + 2 is a unique ministerial dialogue that brings senior ministers together in a bilateral setting. 
  • India maintains Ministerial Dialogue format only with a few key partners like Australia, the United States, Japan, Russia and the United Kingdom. 
  • This will be only the second 2+2 Ministerial Dialogue round with India’s Quad partner Australia after the first round was held in 2021. 

2+2 Ministerial Dialogue – Military, Geopolitical Challenges, and Educational Collaboration 

• Deepening Military Cooperation:  Enhancing collaboration in critical military areas such as anti-submarine warfare and air-to-air refueling.
• Geopolitical Discussions: Addressing Regional Instability – Insights from India Australia Ministerial Dialogue
  • Crisis in West Asia: The ongoing Geo-political challenges of the Israel-Palestinian conflict  in West Asia were part of the dialogue, reflecting the shared concern for regional stability.
  • War in Ukraine: The ministers addressed the war in Ukraine, expressing deep concern over its humanitarian consequences and reiterating support for a just and durable peace.
• Specific Areas of Cooperation
  • Focus on Niche Training Areas: The ministers highlighted the importance of cooperation in niche training areas, including artificial intelligence, anti-submarine and anti-drone warfare, and the cyber domain.
• Security in Indo-Pacific: Charting Responses to China’s Growing Influence
  • China’s Growing Influence: The talks acknowledged the security implications of China’s growing influence in the Indo-Pacific, emphasizing the need for strategic cooperation to address common challenges.
  • Example: China claims nearly all of the disputed South China Sea, though Taiwan, the Philippines, Brunei, Malaysia and Vietnam all claim parts of it. It has built artificial islands and military installations in the South China Sea.
• Defence Industry and Research: Advancements in Defence Industry and Underwater Technologies Collaboration
  • The discussions explored potential collaboration in areas such as shipbuilding, maintenance, repair, and joint research in underwater technologies.
• Advancements in India Australia Education and Skills Partnership
  • Mechanism for Mutual Recognition of Qualifications: Both sides welcomed the signing of the Mechanism for Mutual Recognition of Qualifications between the two countries.
    • The mechanism covers both education and skill qualifications of the two countries and will help facilitate two way mobility of young people for education and employment purposes by mutually recognizing various levels of education and skill qualifications.
  • Progress in Migration and Mobility Partnership Arrangement (MMPA): The first Joint Working Group Meeting on MMPA held in Canberra on 13 October 2023. 
    • Progress towards the launch of the Mobility Arrangement for Talented Early-professionals Scheme (MATES),  will support the mobility of young Indian professionals in identified sectors to Australia.
  • The Indian side welcomed the interest shown by Australian Universities in setting up offshore campuses in India. 
  • Australia-India Education and Skills Council (AIESC): The Ministers commended the first meeting of the AIESC held recently at Gandhinagar, Gujarat
  • ‘Maitri’ fellowship Programme:  Australian Foreign Minister announced  the ‘Maitri’ fellowship programme, under which Indian researchers will get to spend six months to two years at a think-tank in Australia, while researchers from the country will spend the same time at an Indian institution.

The Evolution of India Australia Bilateral Relations into a Comprehensive Strategic Partnership

• Diplomatic Relations: Australia and India established diplomatic relations in the pre-Independence period, when the Consulate General of India was first opened as a Trade Office in Sydney in 1941. 
  • India’s first High Commissioner to Australia arrived in Canberra in 1945.
• Shared Values: India Australia bilateral relationship based on shared values of pluralistic democracy, expanding economic engagement, and high-level interaction. 
  • Both countries have common traits such as strong, vibrant, secular, and multicultural democracies, independent judicial system, free press, and English language. 
• Development of Closer Ties: The end of the Cold War and India’s economic reforms in 1991 strengthened ties. 
  • Growing tourism, sports, and increasing number of Indian students studying in Australia played a significant role in strengthening the relationship.
• Evolution to strategic ties and plurilateral cooperation: Over time, the India Australia relationship became strategic and not just economic. 
  • Recently, they have cooperated on issues like international terrorism and promoting a rules-based order in the Indo-Pacific region.
  • The two democracies have taken their cooperation to plurilateral formats, including the Quad (with the United States and Japan).
• Strategic Ties: Historic Visits and Collaborative Milestones
  • In September 2014: Australia’s Prime Minister Tony Abbott visited India, and in November that year, PM Narendra Modi became the first Indian Prime Minister to make an official visit to Australia after Rajiv Gandhi in 1986.
    • He also became the first Indian PM to address a joint sitting of the Parliament of Australia.
  • June 2020: At the India Australia Leaders’ Virtual Summit in June 2020, Modi and Prime Minister Scott Morrison elevated the bilateral relationship from the Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP).

Diverse Dimensions of India Australia Cooperation in Trade, Education, Defence, and Clean Energy

• Geographical Proximity and Strategic Ties Between India and Australia
  • Australia is situated in India’s extended neighborhood, fostering a unique geographical closeness.
  • Former Australian Foreign Minister Stephen Smith highlighted the proximity, emphasizing that Perth and Chennai are closer than Sydney is to major cities like Seoul, Shanghai, or Tokyo.
• Economic cooperation: The Impact of ECTA on India Australia Bilateral Trade and Cooperation
  • The Economic Cooperation Trade Agreement (ECTA), the first free trade agreement between India and a developed country in a decade, came into force in December 2022. 
  • Reduction in Duties: It has resulted in an immediate reduction of duty to zero on 96% of Indian exports to Australia in value (that is 98% of the tariff lines) and zero duty on 85% of Australia’s exports (in value) to India.
  • Bilateral Trade: The bilateral trade, which was worth US$ 27.5 billion in 2021, is expected to reach US$ 50 billion in five years due to ECTA.
    • Australia is currently India’s 17th largest trading partner and India is Australia’s 9th largest trading partner.
• People-to-people ties: India’s Vibrant Presence in Australia at India@75
  • India is one of the top sources of skilled immigrants to Australia. 
  • As per the 2021 Census, around 9.76 lakh people in Australia reported their ancestry as Indian origin, making them the second largest group of overseas-born residents in Australia. 
  • To celebrate India@75, the Australian government illuminated more than 40 buildings across the country.
• Fostering Student Mobility and International Campus Expansion in GIFT City
  • The Mechanism for Mutual Recognition of Educational Qualifications (MREQ) was signed in March 2023 to facilitate student mobility between India and Australia. 
  • Australia’s Deakin University and the University of Wollongong Indian campuses are being opened in the GIFT City (Gandhinagar). These are the first two international universities to be approved to set up a campus in India
  • More than 1 lakh Indian students are currently studying in Australian universities, making Indian students the second largest cohort of foreign students in Australia.
• India Australia Defence Cooperation
  • The First  2+2 Ministerial Dialogue was held in September 2021.
  • Mutual Logistics Support Agreement (MLSA) was concluded during the Virtual Summit in June 2020.
    • The agreement allows the two countries to access military bases for refueling and logistics purposes, as well as to enhance military engagement and maritime domain awareness between the two countries.
    • India has a Mutual Logistics Arrangement with many countries such as the U.S., France,South Korea and Singapore. 
  • Defense Exercises: 
    • “Malabar” exercises: Australia participated in the MALABAR naval exercise joining India, the United States, and Japan.
    • AUSINDEX: Royal Australian Navy and the Indian Navy  bilateral exercise
    • Pitch Black: For the first time, the Indian Air Force participated in Exercise Pitch Black in Darwin in 2018.

• Clean Energy: 
  • The countries signed a Letter of Intent on New and Renewable Energy in February 2022 which provides for cooperation towards bringing down the cost of renewable energy technologies.During the Virtual Summit in March 2022, India announced matching funds of AUD 10 million for Pacific Island Countries under Infrastructure for Resilient Island States (IRIS) and of AUD 10 million for Pacific Island Countries under International Solar Alliance (ISA).

Challenges in India-Autralia Relations: Visa Issues, Security Concerns, and Economic Hurdles

• Visa issues:
  • There have been concerns over visa restrictions for Indian students and professionals seeking to work in Australia.
  • In April 2023, at least five Australian universities placed bans or restrictions on students from some Indian states, amidst a surge in fraudulent applications from South Asia seeking to work – not study – in this country, according to a media report.
• Khalistan Movement Concerns: The recent surge in ‘khalistani’ activities in Australia to the extent of the ‘Kill India’ rally and open threats to Indian diplomats is a grave concern that needs to be addressed.
  • Prime Minister during his visit to Australia in may 2023, raised the issue of attacks on temples in the country.
• Economic Relationship Limitations:
  • Narrow Economic Ties: The economic relationship is narrow and primarily dominated by coal exports, with challenges in diversifying and expanding trade beyond this sector.
  • Mining Investment Challenges: Indian companies’ plans for significant investments in Australian mining, particularly in coal projects, have faced obstacles, impacting the economic partnership.
• Free Trade Agreement Challenges:
  • Market Access and Labor Mobility: India’s reluctance to liberalize market access in agriculture and Australia’s reservations about allowing significant labor mobility are obstacles to finalizing a comprehensive free trade agreement.
• Lack of Uranium Supply: The progress on uranium supply has been very low, despite efforts from both sides.
  • In 2017, Australia had sent its first uranium shipment to India but that was cited as “a small sample of uranium” transferred “purely for testing purposes”.
• Adani coal mine project in Australia: The proposed Adani Carmichael coal mine project in Queensland, Australia, led by the Indian company Adani Group, has faced environmental and regulatory hurdles.
  • Protesters have raised concerns that the project can possibly increase global warming and also threaten the Great Barrier Reef.

Way Forward: Overcoming Economic Challenges, Advancing Science & Technology, and Ensuring Regional Security

• Navigating Market Challenges: Although the government has achieved a favorable trade deal, India faces hurdles entering the Australian market, given Australia’s 16 operational FTAs.
  • The key to success lies in improving competitiveness, especially considering competition from nations like China, ASEAN, Chile, Japan, Korea, and New Zealand with established FTAs.
• Amended tax laws: The Economic Cooperation and Trade Agreement (ECTA) between India and Australia addresses taxation challenges faced by Indian IT companies. 
  • Australia should commit to amending tax laws, preventing taxation of offshore income from Indian firms providing technical services.
• Science & Technology: The Australia-India Strategic Research Fund (AISRF) serves as a pivotal avenue for collaborative scientific endeavors, jointly funded and managed by both nations.
  • AISRF contributes to India’s and Australia’s integration into the global Science and Technology system, facilitating access and participation on a broader international scale.
  • AISRF paves the way for innovation in crucial sectors, promoting mutual growth and advancements.
• Economic Cooperation: 
  • India and Australia are continuing the momentum over free trade negotiations, following the interim trade pact coming into force at the end of 2022. 
  • Seeking to reap further dividends, the two countries appear to be on the fast lane to conclude a Comprehensive Economic Cooperation Agreement (CECA) by December 2023.
• Control of khalistani activities: Australia should take proactive measures to enhance the safety and security of the Indian community. 
  • India has requested Australia to “ensure the safety and security of members of the Indian community and their properties” and to not allow the use of Australian territory for “activities that would be detrimental to the territorial integrity, security and national interests of India”.
• Open Indo-Pacific Cooperation:
  • Acknowledge and strengthen cooperation between India and Australia in promoting the principles of an open and inclusive Indo-Pacific. 
  • Both countries reaffirmed their support for sovereignty and territorial integrity in the Indo-Pacific, democratic values, rule of law, freedom of navigation and overflight and the peaceful resolution of disputes.

Conclusion: 

• The 2+2 ministerial dialogues have underscored mutual interests in defense, security, and economic collaboration. Despite challenges, including geopolitical complexities and regional tensions, both nations recognize the need for an inclusive Indo-Pacific security framework.
• The ongoing negotiations for a comprehensive economic cooperation agreement reflect a shared vision for diversified collaboration beyond defense. Effective management of challenges posed by China and addressing them.

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