11 India-Australia Relations

Professor R.S. Yadav

Structure of the Module

1. Introduction

2. Objectives

3. Bilateral Relations

3.1 Relations during Cold War Era

3.1.1Common Perceptions on Some Issues

3.1.2Divergent Foreign Policy Outlooks

3.1.3Changed Perceptions during Wars

3.1.4Thaw in their Relations

3.1.5Role Reversal

3.1.6Beginning of Warmth in their ties

3.2 Relations during Post-Cold War Era

3.2.1 End of Cold War and Global Changes

3.2.2 Implications of Globalization

3.2.3 Emerging Irritants

3.2.4 Emerging Convergences

3.2.5 Existing Divergences

3.2.6 Emerging Political Understanding

4. Conclusion

5. Important Questions

6. Suggested Readings

1. Introduction

India and Australia represents two large geographical entities acquiring important position in their respective regions. Globally as well, a significant role to be played by them in terms of geo-strategic and geo-economic ways is not ruled out. Bilaterally, the commonality in terms of – democratic setup, parliamentary government, commonwealth brotherhood, English language, common legal, financial and governmental institutions, interests in the Indian Ocean rim etc. – shared by them give them a feeling of ‘approximation’ rather than ‘distant’ country. However, like any independent sovereign states, both differ in terms of security and global outlook, but are devoid of any serious conflictual issue.

2. Objectives

In this module an effort has been made to describe the changing contours of India- Australia relations during nearly last seven decades. Here it is analyzed that why in the beginning despite prevailing of numerous commonalities, both countries could not get along with towards warm relationship? How there divergent foreign policy approaches are responsible for their differences? It is also explained that gradually thaw in their relations was noticed particularly during India’s wars with China and Pakistan. But why such goodwill disappeared very soon is a matter of examination? What are the factors and forces that led to such kind of affair is a matter of in-depth analysis? But somehow changed global milieu and bilateral compulsion again brought out goodwill between the two. The reasons for such change and closeness are explained in this module. An effort is also made to evaluate that how major developments of 1990s led to qualitative transformation in their relations. These important factors were – end of cold war and beginning of globalization process. It is further examined that how changed global milieu and bilateral compulsions of both brought out such warmth in their bilateral ties. Here it is also examined that how changed economic relations have attracted Australia towards India, on the one hand; but how issue of nuclear proliferation led them to drift apart, on the other hand. This factor was manifested at the time of Australia’s reaction on CTBT debate and after India’s Pokhran-II nuclear explosion. Their relations reached a level of brinkmanship at that time. It is further evaluated that how these differences got mitigated and again both started on a warmth note visible during Modi’s visit to Australia in 2015. Thus, in this unit compulsions and interests of both countries are examined to discern a trend in their bilateral ties.

3. Bilateral Relations

3.1 Relations during Cold War Era

During cold war period relations between India and Australia have not been very cordial. There have been ups and downs in their bilateral ties. However, during the period of labour party, their relations used to have been one of warmth as compared to the period of non-labour party in power in Australia. But due to absence of any traditional bilateral irritants, the main factors that shaped their relations have been their divergent perceptions on issues of defense and security, along with their worldview. Their changed outlook on these issues has led to the improvement in their relations.

3.1.1Common Perceptions on Some Issues

Both countries started their relations on a healthy note. When India became free, Labour Party’s response towards India created goodwill between the two. On issues like anti-colonialism, anti-imperialism, anti-racialism, support for the national liberation struggles, Asian outlook etc., both shared common perceptions. Their membership of commonwealth provided them the security and defense needs of both of them. On the question of Asian unity, both agree to form a common platform. That is why; both shared the common forum of Asian Conference held in New Delhi in 1947 and 1949. But this good will did not remain for long as in 1949 Liberal Conservative party came into power in Australia which had different orientation towards this region. Thus, Indo-Australian relations which began optimistically did not remain so for longer period.

3.1.2 Divergent Foreign Policy Outlooks

From 1949 onwards, Australia started drifting from warm ties with India. With the adoption of policy of non-alignment, India started looking towards global issues independently and without being influenced by the vision of colonial powers, Whereas Australia joined the military blocs through military pacts like ANZUS (1952) and SEATO (1954). Their different values and imperatives cast a long shadow on the formal bilateral relationship. Later, Australia’s involvement in Kashmir dispute by sending six military personnel every year from 1948to1985 as part of the United Nations Military Observer Group in India and Pakistan (UNMOGIP) and by appointing Sir Owen Dixon, a judge of the High Court of Australia, as UN mediator led it away from India.

3.1.3 Changed Perceptions during Wars

Though some silver linings were witnessed in Australia’s response towards India’s wars with China and Pakistan during this period, yet these were not much deep rooted and durable. Australia supported India during Sino-Indian war in 1962, and as a result, the Royal Australian Air Force took part in air defense training exercises in the Eastern and Western sectors of the Sino-Indian boundary in November1963. During 1965 India-Pakistan war also, it adopted neutral posture and welcomed the signing of Tashkent Agreement between India and Pakistan. During 1971 Indo – Pak war, Australia shown more restraint and adopted a position of neutrality during war and recognized Bangladesh on 31 January 1972. However, such support for India’s point of view was largely influenced by changed American foreign policy postwar towards India.

3.1.4 Thaw in their Relations

In 1972, goodwill between India and Australia emerged after coming of Lobour government to power in Australia. Convergence of interests in number of areas emerged between India and Australia. Now the Indian Ocean was seen by both the states as an area to be free from international tensions and rivalries. Hence, Australia’s view was closer to that of India’s point of view of making this area as a zone of peace. Australia now condemned racial discrimination and supported India’s stand on apartheid in the United Nations. Better appreciations for Indian policy of non- alignment also started. Australia’s attending the meeting of NAM’s Foreign Ministers’ conference at Lima, Peru in 1971 as guest shows its keen desire in the activities of NAM.

3.1.5 Role Reversal

This improvement of ties between them did not proceed for longer period. India’s declaration of emergency in 1975 and sacking of the Whitlem government by the Governor General in Australia in the same year led to the disruption of emerging goodwill between them. For next eight years (1975-1983) relations between India-Australia again faced rough weather. The decline in bilateral ties was marked by the changed foreign policy stance by the new government in Australia. Because of its pro-American approach, new Australian Government not only reversed its policy towards Indian Ocean as a zone of peace (IOZOP), but also supported the establishment of American bases in this region. Despite divergent approach towards the security and defense related issues, Australia continues to appreciate India’s policy of non-alignment. It condemned the apartheid policy in South Africa. Australia also supported the demand for the creation of new international economic order (NIEO).

3.1.6 Beginning of Warmth in their ties

The period from 1983 till the end of cold war again was one of warmth and understanding between the two countries as it was an era of labour government. During the November 1983 Commonwealth Summit (CHOGM), Prime Ministers of both countries held fruitful discussions on areas of mutual benefit. Despite divergent perceptions on certain issues, both supported the proposal of Indian Ocean as a Zone of Peace (IOZOP). Australia again attended NAM summit as guest and also welcomed the formation of SAARC in South Asia.

Rajiv Gandhi’s visit to Australia in 1986 witnessed the emerging closeness between the two states. This visit was reciprocated by the visit of Australian Prime Minister in 1989. As a result, both countries established a joint ministerial commission in the same year. Both also coordinated efforts on the issues relating to GATT, IMF, and World Bank. However, during this period one main irritant between them was created by the sale of 50 Mirage fighter aircrafts to Pakistan by Australia in 1990. Though India took this issue with serious concern, yet it could not damage the emerging ties between the two. It only affected their relations temporarily and for a brief interval.

3.2 Relations during Post-Cold War Era

3.2.1 End of Cold War and Global Changes

The year of 1991 was crucial in bringing about significant positive change in the India-Australia relations. The happenings during this period brought the two more closer to each other. Consequently, both India and Australia took number of initiatives which developed goodwill between them. The end of cold war brought out the end of ideological division of the world. As a result, substantial changes took place in the functioning and outlook among the relations between the states. Economic issues gained importance and new kind of alignment and reorientations among bilateral ties of was inevitable. Now states were building their relations on more objective understanding devoid of ideological moorings and dictates of major powers. Ideological alliances were replaced by more pragmatic realization among states. Consequently, a fresh beginning, among earlier distant neighbours, was inevitable. India and Australia were no exception to such post-cold war phenomenon.

3.2.2 Implications of Globalization

India and Australia were simultaneously going through a process of liberalization of their economic system. Though Australia was not a developing economy like India, yet globalization has had a similar impact on both of them. It forced to do away with trade barriers to achieve international competitiveness. Simultaneous India’s “look east” policy, along with structural reforms combined with Australia’s “look west” programme brought the two countries closer to each other. These new structural changes and India as second largest consumer market attracted attention of Australian government. Establishment of “Australia-India Council” (AIC) in 1992 clearly manifested Australia’s such concern. It was later reciprocated by India in 1997 through the formation of “India-Australia Council” (IAC). In 1994, Australian government made an in-depth study of Indian economy and found that there is huge potential for economic relations among the two countries. Accordingly an overview of opportunities available to Australia in India and its strategy to take maximum advantage of such opportunities are analyzed in ‘Australia-India: New Horizon’ (1996). Besides, multilateral cooperation through their common efforts for the setup of Indian Ocean Rim- Association for Regional Cooperation (IOC-ARC) in 1997 enhanced their friendly ties. Their common perceptions towards ASEAN, ARF and WTO have also strengthened their bi-lateral ties.

3.2.3 Emerging Irritants

A severe setback to such emerging goodwill was noticed at the time of Australia’s reaction to India’s Pokhran-II nuclear explosions in May 1998. Australia’s strong protest of the Indian nuclear tests has outstripped the reactions by the other nuclear powers; Indian government took deep offence at this oral intemperance. As protest, Australia took following measures —recalling of its High Commissioner for consultations; suspension of bilateral defense relations; recall of Australian defense advisers; recall of its defense personnel currently on training in India; sending back Indian defense personnel undergoing on training at Defense College in Australia; suspension of non- humanitarian aids; suspension of ministerial and senior official visits etc. India too conveyed its displeasure by responding similarity to Australian government’s actions. However, Australian Govt. realized its tolls soon and sent high power delegation and visit to India to restore the good will. It again created better understanding of each other’s concerns and interest. Though both continue to hold diverged perception or nuclear non- proliferation, yet they were successful in strengthening their convergences and reduce their divergences.

3.2.4 Emerging Convergences

Global changes and bilateral initiatives have manifested immense economic potential between India and Australia. On numerous economic issues, convergence of interests between them could be easily discerned. The emerging commonalities in areas of- (a) trade; (b) foreign direct investments; (c) joint ventures; and, (d) multilateral co operations led to some short of convergence in their economic ties:

i) Trade between India and Australia was a such important area and reached at a new height during the last two decade. In 1991-1992 total trade between them used to be A$ 1047 million, which rose to A $ 2834 million in 2000-2001. It has enhanced to nearly three times in one decade. Though in terms of total amount, both imports and

exports from India to Australia have been increasing, yet in terms of the percentage of increase over previous years, India’s imports have increased substantially but India’s exports to Australia did not enhance with the same pace. In bilateral trade, India became 13th country for Australian exports. Though the percentage of Australia’s export is very low at 1.6 percent of its total trade, yet India’s share of Australia’s total import is much lower than the exports. Major areas of import and export between the two countries are numerous. Principal Indian export to Australia are – textile and clothing; chemicals and related products; engineering products; leather goods; gums and jewellary; processed foods etc. Whereas India’s imports from Australia consist of – coal ; cooking coal ; mining equipments ; wool ; copper ; base metals and ores ; diamonds ; wheat ; software ; automotive components and services ; food processing equipments etc. To institutionalize the rapidly expanding trade, both of them have established the Joint Ministerial Commission (JMC), Joint Business Council (JBC), and Joint Working Group (JWG) on energy and minerals. Both have also signed agreements regarding – (i) cooperation in science and technology; (ii) for avoidance of double taxation and prevention of fiscal evasion; (iii) investment protection agreement. Thus, despite some minor problems overall trade relations between them are running smoothly.

ii) FDI has been another area of economic. Cooperation between the two during the last two decade (1991-2001). The total amount during last ten years has been Rs. 67,340 million and it ranked as the 8th largest source of foreign investments in India. However, the actual investments came from Australia has been only A$ 1bn.Cosequently, its share in India’s total investments received from outside world is only 2.5 percent. Thus, a lot more is needed by both the countries to boost up their transactions in terms of FDIs.

iii) Both countries possess huge potential for joint ventures in the changed economic scenario. Though a moderate beginning has already been made in this context, yet a lot more is still required to be done in this direction. Since 1991, a total of 407 joint ventures from Australia have been approved by the government of India. Out of them 266 collaborations were financial and 141 technical. In this context, companies from both the countries have to build major inroads in each others’ market. For instance, Indian information technology companies have entered Australia with several major openings of their offices to service better to Australian business and organizations. They are mostly concentrated in Sydney. Important among them are – NIIT, HCL, TCS, Pentasoft, Satyam, Wipro, Infosys, Aptech Worldwide, ITIL Australia Pvt. Ltd., Mahindra-British Telecom Ltd., Mega soft Australia Pvt. Ltd., and Zensar Technologies etc. India’s Dastur Engineering International Company also has setup its office in Sydney. ‘The Windsor’ hotel in Melbourne also belongs to Oberoi Hotels group. Titan watches have made its presence through its showroom in Sydney. Asian Paints has recently taken over the Pacific Paints in Queensland. Sterlite Industries has acquired two copper mines at Mt. Loyell. Air India, ITDC, State Bank of India and New India Assurance Co. Ltd. have opened their offices in Australia. Australian business houses have also reciprocated this Indian gesture. ANZ-Grind lays with its 56 branches through India has became the largest foreign bank in India. Other major companies installed in India are – RTZ-CRA, National Mutual, Qantas, Cot tee Corporations, Jord Engineers etc. Under the science and technology agreements both the countries are successfully collaborating in the areas of financial and education services, environmental technologies, computer software, telecommunications, waste management, crop virus and testing of pesticides residues in foods etc.

iv) Beside bilateral co operations, both are working towards the enhancement of cooperation through multilateral forums as well. ASEAN, IOC-ARC and WTO are such forums where both the countries are keenly associated. Given their size and potentials they are in a position to play very vital roles to make these organizations vibrant. Despite some differences regarding the scope and working of these institutions, both are sharing the broad commonality of interests in these regional groupings.

3.2.5 Existing Divergences

Issues relating to defense and security are the main areas of differences between India and Australia. Besides, their differences on the issue of non-proliferation came to the forefront very prominently at the time of India’s Pokhran II nuclear explosions in May 1998.Difference between them also exists on the role and functions of some multilateral bodies where both are members. These differences between the two can be explained as under:

(a) Though, both India and Australia cherish a common goal off nuclear weapons free world, yet both followed difference of opinion over CTBT in general and India’s nuclear explosions in May 1998 in particular. Australia took a very dogmatic approach to CTBT without looking into the facts that India was a joint sponsor (along with the USA) of this treaty. India was surprised to note that Australia did not support India’s contention of time bound arrangement of disarmament under CTBT. Even the role and the pattern followed by Australia for presenting CTBT to General Assembly were also not liked by India. It was all the more shocking when Australia reacted on Pokhran II in a very irresponsible manner than that of the USA.

(b) Australia’s reaction to India’s nuclear explosions created an apprehension about formers lack of concern for latter’s security requirements. Among the numerous factors determining India’s decision to go nuclear, the threat to its security from its neighbours – China and Pakistan – had been very prominent. The nuclear weapon capabilities of India’s traditional rivals shaped its strategic posture, including its decision for nuclear explosions in May 1998. Chinese assistance in enhancing Pakistan’s nuclear and missile programme have sharpened the issue and created a complex triangular security relationship among the three. Australia, never realized Indian compulsions in proper perspective, rather swayed by the policies of nuclear power states. Thus, Australia never developed an appropriate policy to address India’s legitimate security concerns. It fails to understand that developments in India’s vicinity and changed global nuclear scenario have compelled it to utilize its nuclear option. Therefore, Australian response to India’s nuclear explosions created more misunderstanding between the two countries.

(c) India and Australia differ with each other in certain multilateral forums like – IOC-ARC, APEC etc., which have created irritants in their bilateral ties. Though both India and Australia took lots of pains to make IOC-ARC a reality in the post- cold war regional co operation, yet both differed for the incorporation of security dimension under this forum. Besides, Australia was in favour of extending its membership to Pakistan as well, while India was not inclined towards any such increase. Similar problem has been witnessed regarding their mutual perceptions about the membership of certain regional organizations. Under the ‘look east’ policy

India is not only enhancing its position in the ASEAN, ARF, IOC-ARC etc., but also interested to be part of the larger Asia- Pacific grouping. Consequently, joining of APEC has been the ultimate goal of India’s such movements. But Australia is not in favour of India’s joining of this forum.

3.2.7 Emerging Political Understanding

During the cold war period, India and Australia suffered in their bilateral relations due to “image problem” and divergent political outlooks. The reciprocal exchange of political visits undertaken by the elites of both countries during the post- cold war era, to a great extent, has been able to remove these misperceptions. Changed international milieu also worked as a positive input in enhancing their bilateral ties. Post- Pokhran II developments temporarily put a comma or hic up in their relations but this slide down has been arrested by the imaginative political initiatives taken by the political leadership in both the countries. Numerous Australia leaders visited India during 2000 to 2002 to do away with the bitterness created after its reactions of Pokkran II. Both the countries revived their official level their process of bilateral consultations. In February 2002, Secretary level talks between the two countries were revived in New Delhi. Next such meeting was convened in Canberra in April 2003. There were extensive discussions and exchange of views by both the countries on issues of bilateral, regional and global concerns. ‘Dual-track’ diplomacy has been given importance to break this temporary deadlock and enhancement of durable relations between them. Through Australia-India Council (AIC) and Australian Education International (AEI) awareness among the scholars about Australia has been created. Some voluntary academic efforts by ‘Melbourne Group’ (Monash University, Australia) – a loose and fluid association of concerned experts in Australia, America and Asia was formed to review the substance, meaning and implications of the nuclear situation in South Asia after May 1998.

4. Conclusion

Now future of smooth India-Australia relations will be dependent on three fold activities – (a) In terms of bilateral trade, both need to diversify their trade so as to include new areas of co operation between them. Moreover, intensification of bilateral trade is also essential as at present both constitute vary marginally in each others’ trade strategies. Their overall trade in terms of percentage of share in world trade is very meager. (b) Both the countries have to understand each others’ defense and security related issues with more sensitively. Particularly, Australia has to take an in-depth analysis of south Asia defense scenario- vis-à-vis possible threat to Indian security. On nuclear non-proliferation issue as well, both have to make an objective assessment. Besides, a more accommodative approach by each other at regional multilateral forums could further enhance their bilateral understandings. (c) Both have to devise a common framework/strategies to tackle certain problems of trans-border non-traditional threats emanating from narcotic drugs, piracy, freedom of sea lanes of communications, terrorism, export of small weapons, conditionality of WTO etc. Thus, a pragmatic and objective reorientation in the light of above three-fold directives is going to remove misunderstanding between them and is likely to open new vistas for smooth bilateral ties. Despite some divergences, the areas of convergence between them are enormous. Need is only to understand and channelize them in an appropriate direction.

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Suggested Readings

a ) Books/Articles

Meg Gurry, India: Australia’s Neglected Neighbour, 1947-1996, Brisbane,1996.
Meg Gurry, “Leadership and Bilateral relations: Menzies and Nehru, Australia and India, 1949-1964,” Pacific Affairs, 1992.
Alison Broinowski, ”Orange Juice or Great Western: Indian and Australian mutual perceptions in the 1940s and 1950s”, South Asia, vol. 23, Special Issue, 2000.
Menzies’ Papers, National Library of Australia, Canberra, MS 4936, Series B, Overseas diary,1955.
Brush Grant, “Some Reflections on 1975,” South Asia, vol. 23, Special Issue, 2000.
Michael Hillman, “Thee Grand Old Duke of York: Indo-Australian Relations Post-Test”, South Asia, vol. 23, Special Issue, 2000.
Auriol Weigold, “Introduction”, South Asia, vol.23, Special Issue, 2000.
Australia, Dept. of Foreign Affairs and Trade, East Asia Analytical Unit, India’s Economy at the Midnight Hour : Australia’s India Strategy, Canberra, AGPS, 1994.
Australia and India: New Horizons and Practical Cooperation, Public Policy Forum, New Delhi, 1996.
Richard Broinowski, “India, China, Australia: The Fractured Triangle”, South Asia, vol. 23, Special Issue.
Jenelle Bonnor, Australia-India Security Relations: Common Interests or Common Disinterests?, Australian Defense Studies Centre, Canberra, April 2001, Working Paper no. 67.
Marika Vicziany, “Australia-India Security Dialogues: Academic Leadership in the Diplomatic Vacuum “, South Asia, vol. 23, Special Issue, 2000.
Waheguru Pal Singh Sidhu, Enhancing Indo-US Strategic Cooperation, London,1997, Adelphi Paper no. 313.

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