INDIA
17 March 2025
Australia-India Comprehensive Strategic Partnership
Economic and political factors are forging ever closer bonds between Australia and India, writes John West.
Australia and India have long had much to connect the two countries. Back in the day, it was said that the countries were bound by the "three Cs" of cricket, the Commonwealth and curry. But despite much potential, economic relations were underdone and political relations sporadic.
But over the past decade or so, things have been changing. Indeed, it is time to add another three Cs to the lexicon -- commerce, culture and China.
As Gateway House, a leading Indian think tank, has noted in a recent excellent report, trade is now booming between the two countries -- "Bilateral trade in goods and services was $16 billion in 2008-09, inched up to $18 billion in 2020 and is now at $25.9 billion."
A pathbreaking 2018 report by former Australian Foreign Secretary Peter Varghese, "An India Economic Strategy to 2035" highlighted the potentials when he said that “no market over the next 20 years offers more growth opportunities for Australian business than India”, projecting a 10-fold growth in Australian investment in India, to $100 billion by 2035. In a spirit of partnership, this report was complemented by a reciprocal Australia Economic Strategy Report, drafted by Anil Wadhwa, former Secretary (East), Ministry of External Affairs.
Australia and India have been exploiting their complementary comparative advantages in developing their commercial relations. Australia has a wealth of mineral resources and agricultural commodities, while India’s strength is in services and labour-intensive manufacturing.
They have also been overcoming reticence and establishing trust by prime ministerial visits, joint participation in the Quadrilateral Security Dialogue along with the US and Japan, and a deepening of the defense and space relationships.
And most importantly, India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in 2022. This is a pragmatic, “first-stage agreement”. Tariff reductions in key Indian sectors such as apparel, industrial machinery and electrical equipment have improved market access. Indian exports of engineering goods, electronics and plastics to Australia have also improved. The next step will be the Comprehensive Economic Cooperation Agreement. which will hopefully be agreed following the upcoming Australian national elections.
As promising as the Australia/India commercial relationship is becoming, "cultural linkages" between the two countries have also strengthened dramatically through the migration of Indian nationals to Australia. Today, Australia's population of 27 million includes almost one million people of Indian origin.
This includes 100,000 Indian students studying in Australia. Further, India has become the fifth most important source of tourists in Australia, with 405,000 trips for the year ending September 2024. Needless to say, this ever closer people-to-people relationship is fostering mutual understanding between the two countries, and laying deeper foundations for economic co-operation.
This brings us to the last “C”, namely China. As both Australia and India have suffered from a deterioration in political relations with China, this has provided a strong incentive to diversify economic and political relationships, by strengthening partnerships with each other.
On the occasion of a Indian Study Tour with the Australian Institute of International Affairs, we visited Gateway House and received a rich briefing on the various aspects of the Comprehensive Strategic Partnership between India and Australia. The energy and enthusiasm on both sides gives me great optimism for the future of the Australia/India Partnership.
And the Gateway House report on which this article is based, “India-Australia Economic Cooperation and Trade Agreement”, is highly recommended reading. It can be accessed at the link at the bottom of this article.
But over the past decade or so, things have been changing. Indeed, it is time to add another three Cs to the lexicon -- commerce, culture and China.
As Gateway House, a leading Indian think tank, has noted in a recent excellent report, trade is now booming between the two countries -- "Bilateral trade in goods and services was $16 billion in 2008-09, inched up to $18 billion in 2020 and is now at $25.9 billion."
A pathbreaking 2018 report by former Australian Foreign Secretary Peter Varghese, "An India Economic Strategy to 2035" highlighted the potentials when he said that “no market over the next 20 years offers more growth opportunities for Australian business than India”, projecting a 10-fold growth in Australian investment in India, to $100 billion by 2035. In a spirit of partnership, this report was complemented by a reciprocal Australia Economic Strategy Report, drafted by Anil Wadhwa, former Secretary (East), Ministry of External Affairs.
Australia and India have been exploiting their complementary comparative advantages in developing their commercial relations. Australia has a wealth of mineral resources and agricultural commodities, while India’s strength is in services and labour-intensive manufacturing.
They have also been overcoming reticence and establishing trust by prime ministerial visits, joint participation in the Quadrilateral Security Dialogue along with the US and Japan, and a deepening of the defense and space relationships.
And most importantly, India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in 2022. This is a pragmatic, “first-stage agreement”. Tariff reductions in key Indian sectors such as apparel, industrial machinery and electrical equipment have improved market access. Indian exports of engineering goods, electronics and plastics to Australia have also improved. The next step will be the Comprehensive Economic Cooperation Agreement. which will hopefully be agreed following the upcoming Australian national elections.
As promising as the Australia/India commercial relationship is becoming, "cultural linkages" between the two countries have also strengthened dramatically through the migration of Indian nationals to Australia. Today, Australia's population of 27 million includes almost one million people of Indian origin.
This includes 100,000 Indian students studying in Australia. Further, India has become the fifth most important source of tourists in Australia, with 405,000 trips for the year ending September 2024. Needless to say, this ever closer people-to-people relationship is fostering mutual understanding between the two countries, and laying deeper foundations for economic co-operation.
This brings us to the last “C”, namely China. As both Australia and India have suffered from a deterioration in political relations with China, this has provided a strong incentive to diversify economic and political relationships, by strengthening partnerships with each other.
On the occasion of a Indian Study Tour with the Australian Institute of International Affairs, we visited Gateway House and received a rich briefing on the various aspects of the Comprehensive Strategic Partnership between India and Australia. The energy and enthusiasm on both sides gives me great optimism for the future of the Australia/India Partnership.
And the Gateway House report on which this article is based, “India-Australia Economic Cooperation and Trade Agreement”, is highly recommended reading. It can be accessed at the link at the bottom of this article.