In meetings this month with Prime Ministers of Japan and Australia, Indian Prime Minister Narendra Modi has continued to be an “investment magnet”, with both countries committing large sums to India. India also strongly signalled that it continues to be wary of “multilateral” groupings and has a preference to do deals country by country.
In the meeting on Monday, Australian Prime Minister Scott Morrison cemented ties with India in a series of deals worth almost A$190 million.
But it was also another example of India taking its own stance in the global “contest of ideas”. One side of the contest is led by the USA with followers such as Australia, who believe democracy is the only acceptable form of government, and create multilateral groupings to back this up. The other side, now being led by India, accepts that the world is diverse and there are many forms of government, so it pursues unilateral agreements.
Right now, Modi is riding high with this more balanced approach, and he has numbers to back it up – India remains the world’s fastest growing economy.
The message for Australia is clear – if Australia wants to get closer to India, it needs to do so separate from the USA and Japan. There is much at stake for Australia, with a large part of the country bordering the Indian Ocean. The Modi-Morrison meeting on Monday formally announced a series of deals ranging from an A$17.9 million skills package, an agreement to work together on critical minerals and an A$35.7 million deal to develop “green steel” that can be produced without coal.
The two Prime Ministers also agreed on an A$25.2 million programme on space cooperation, A$28.1 million for a Centre for Australia-India Relations, A$20.8 million for cultural partnerships and A$4.3 million to support work on liquified natural gas supply between Australia, India and Bangladesh.
Other agreements included A$5.8 million initiative aimed at encouraging Indian investment in Australian critical minerals projects and A$1.5 million to encourage Indian mining companies to look at Australian projects.
Future relations between India and Australia will include a focus on the services sector in trade and people’s movement, so it was significant that the Monday night talks also included a taskforce to see if both countries could recognise the same education qualifications. There was also an agreement with Australian multicultural broadcaster SBS on joint broadcasting with an Indian partner. The National Gallery of Australia also formalised the return of artefacts to India.
The Australian side was keen to explore more security linkages, and on Monday night established a “young officer exchange programme” for personnel from each country’s defence forces, as well as stronger cooperation on “maritime issues” as well as the deployment of an Indian maritime patrol aircraft to Australia.
India, with a special focus on stability in the Indian Ocean, is a keen participant in unilateral security deals, but maintains a view that it is the countries of the Indian Ocean region that should take responsibility for stability, rather than an international grouping including the USA.
Australian Prime Minister used his opening remarks to focus on the “war in Europe” and the need for sanctions, but he quickly shifted the tone to: “While we are obviously distressed at the terrible situation in Europe, our focus, of course, is always very much on what’s occurring in the Indo-Pacific and making sure that those events could never occur here in the Indo-Pacific.” This is a major accommodation of PM Modi’s position of not taking strong positions on global conflict such as in the Ukraine.
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Signs are that the other members of the QUAD – Japan, USA and Australia – accept the right of Modi and his ministers to insist the Quad is focused on the Indo-Pacific and not a forum for cooperation on the war in Ukraine. This is a major win for Modi – he has got India into the QUAD, but is doing it his way.
The India-Australia summit comes after the first virtual summit held between the two nations on June 4, 2020. That historic summit had elevated the relationship between the countries to a ‘Comprehensive Strategic Partnership’. In the wings are some “early harvest” deals for a free trade deal – possibly to be announced this month.
Earlier, Prime Minister Modi had met with Japanese Prime Minister Fumio Kishida in New Delhi and Japan committed about A$57 billion investment to India. The money will finance appropriate public and private projects of mutual interest.
The challenge for Australian PM Morrison is, having lifted investments into India, can he follow up by leading Australia’s vast superannuation and investment management funds (fourth largest in the world) to invest more in India? Taking an investment mission to India would send a great message to PM Modi.
And the challenge for India and Australia is to build security for the Indian Ocean region. It is, after all, our shared home.
Stephen Manallack is blogger at INTO INDIA, Director of EastWest Advisors and former President of Australia India Business Council. The views expressed in the article are those of the author and do not represent the stand of this publication.
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