Can Australia ride the ‘Modi wave’ to better relations with India?

India PM Narendra Modi poses for a photo with an Australian Indian.
18 November 2014
India PM Narendra Modi poses for a photo with an Australian Indian.

Historic visit by PM a chance to deepen ties, writes Ian Hall. 

Narendra Modi’s upcoming trip to Australia is the first by an Indian prime minister in almost 30 years.

He will arrive as the most successful Indian politician in a generation, having engineered the so-called ‘Modi wave’ that swept him to victory in an election in May. And he comes at a moment at which India’s foreign policy is in flux, providing an opportunity to influence its direction in ways that might be positive for Australia.

Back in 1986, when Rajiv Gandhi met Bob Hawke in the last official visit by an Indian PM, Australia and India were worlds apart. Australia was a staunch US ally, while nominally nonaligned India’s closest friend was the Soviet Union. Bilateral trade between Australia and India was negligible. In Canberra, there was concern that India’s naval build-up would destabilise the Indian Ocean region, threatening Australia’s growing trade with the rest of Asia. In New Delhi, there was mistrust of Australian attempts to try to force India into the Nuclear Non-Proliferation Treaty, preventing it from developing its own nuclear deterrent.

Relations improved after the end of Cold War, but not much. For a few years, trade grew, but better diplomatic and defence ties were hard to forge. Then came India’s nuclear weapons tests in 1998. Australia reacted harshly, imposing sanctions and withdrawing its defence attachés from both New Delhi and Islamabad. In turn, Indians accused Canberra of hypocrisy: how can you criticise India for seeking a nuclear deterrent, they asked, when Australia’s security is also guaranteed by the same means, albeit with weapons that belong to an ally, the United States?

When tempers cooled, John Howard went to New Delhi in 2000 to patch things up. In the years since, every Australian PM has made the same trip – Kevin Rudd went in 2009, Julia Gillard in 2012, and Tony Abbott in 2014. These efforts paid dividends.

The value of bilateral trade increased from about $3.5bn to $21bn between 2001 and 2009. Australia and India concluded a number of deals to improve defence and security ties, including an agreement to form a ‘strategic partnership’, signed in 2009. The two also worked together to revive the Indian Ocean Regional Association (until recently called the Indian Ocean Region – Association for Regional Cooperation), which draws its 20 member states into regular dialogue about areas of mutual concern.

For all this, however, there is a still a perception that the relationship should be stronger. Bilateral trade languishes at around the $15bn mark and inward investment flows from India into Australia sit at around $11bn – and at a paltry $6bn in the other direction. Enrolments of Indian students in Australian universities have rebounded after the 2010 crisis over their safety, but Australia’s higher education providers have struggled to make headway in building stronger ties with institutions in India.

Defence and security ties have also arguably languished since Kevin Rudd’s decision, early in his prime ministership, to pull out of the Quadrilateral Security Dialogue, a Japanese initiative involving India and the United States, as well as Australia. The signing of the Australia India Civil Nuclear Agreement, in September 2014, which opens the way for the export of uranium to India, is arguably the only significant recent achievement in the relationship.

Modi’s visit represents an opportunity to regain some momentum. It will highlight too one of the most important changes in Australian society that may well have long-term effects on the relationship with India: the migration of significant numbers of Indians into the country. There are now about 300,000 Indian-born migrants living in Australia, and Modi will address some of them at a rally at Sydney’s Allphones Arena during his visit.

Yet despite these burgeoning cultural ties, making substantial progress in building the bilateral relationship will not be easy. Australia and India face common challenges, but are addressing them in different ways, based on differing assumptions.

Like Canberra, New Delhi is worried about Beijing’s intentions in the region and China’s capacity to be a disruptive influence, or even a direct threat to its interests. Unlike Australia, however, it does not have an alliance with the US to shelter behind.

So it is hedging.

It is seeking cordial relations with the Chinese, building their trading relationship and signing up to some of its initiatives, including the Asian Infrastructure Investment Bank. At the same time, it is forging strategic partnerships with certain Asian states, like Indonesia, Singapore, Vietnam and especially Japan, building stronger defence and security ties, and carefully tending its ties to Russia, from which it buys most of its arms.

This ‘multidirectional’ foreign policy belies an Indian perception that American influence in the Asia-Pacific is waning, as well as a preference for a ‘multipolar’ international order. These assumptions are quite different to those common in Canberra, where there is a recognition that while US power is in relative decline, the order it has created and sustained in the Asia-Pacific will (and must) persist.

These diverging strategies and underlying attitudes means that the ‘Modi wave’ is unlikely to produce rapid improvements in Australia-India relations. But the mere fact that an Indian PM will spend three days in Australia will focus welcome attention on ties that need carefully nurturing if they are to flourish.

Dr Ian Hall is a Senior Fellow in International Relations at the Australian National University’s College of Asia and the Pacific. 

This article was also published in 
The Canberra Times




Updated:  24 April, 2017/Responsible Officer:  Dean, ANU College of Asia & the Pacific/Page Contact:  CAP Web Team