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Under China’s Shadow, India Looks to Australia

India and Australia strategize on trade, energy, and naval security

By Ashok Malik Created: February 10, 2013 Last Updated: February 10, 2013
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Australian Prime Minister Julia Gillard gestures as she watches Indian girls at a cricket clinic for disadvantaged youth in New Delhi on Oct. 16, 2012. (Manan Vatsyayana/AFP/Getty Images)

Australian Prime Minister Julia Gillard gestures as she watches Indian girls at a cricket clinic for disadvantaged youth in New Delhi on Oct. 16, 2012. (Manan Vatsyayana/AFP/Getty Images)

For the past few years, as China’s emergence has cast an increasing shadow over the region, Canberra’s strategic thinkers have tried to interest New Delhi in the concept of the “Indo-Pacific” as the two former colonies of Britain, now two leading democracies, find common ground.

Those strategists in Australia, the shores of which are washed by both Pacific Ocean and Indian Ocean, may have cheered as the India-ASEAN Commemorative Summit, marking 20 years of dialogue partnership between the South Asian country and the Southeast Asian bloc, opened on Dec. 20 in New Delhi. Addressing guests, Prime Minister Manmohan Singh was expansive in ambition and geographic reach: “Our future is inter-linked and a stable, secure, and prosperous Indo-Pacific region is crucial for our own progress and prosperity. There is, therefore, mutual benefit in these aspects of our engagement.”

Contrasting enthusiasm for the Indo-Pacific as a cornerstone of strategic architecture—even occasional differences of opinion as to its physical boundaries—has been apparent in Australia and India. This formed a backdrop to deliberations in December at the Australia-India Roundtable—semi-official dialogue supported by both governments and facilitated by three think tanks, the Lowy Institute in Sydney, the Australia-India Institute in Melbourne, and the Observer Research Foundation in New Delhi.

The Australians returned from the roundtable in New Delhi with little clarity as to where India stood in terms of the Indo-Pacific and naval synergy in the region. The Indian navy is undergoing the most rapid expansion in history and has ordered more than 40 ships, to be delivered over the next five years. Senior naval officers have spoken of augmenting fleet strength by another 80 ships as and when money is available.

The key question is where will these ships be used? The traditional Indian position has been to emphasize a natural role in the Indian Ocean. Despite occasionally ambiguous statements, military and political spokespersons in India have shied away from committing to the Pacific. Even as China has made forays into the Indian Ocean, India has been wary of acknowledging that it considers the South China Sea within its legitimate domain, despite investment in offshore oil exploration in Vietnamese blocks by India’s Oil and Natural Gas Corporation.

Indian Footprint

On their part, Australia and sections of ASEAN have pushed for a more visible Indian footprint. In formally using the portmanteau “Indo-Pacific,” Singh may just have expanded the frontiers of Indian grand strategy, thereby sending the Australian Roundtable delegates a delayed message.

As flanking democracies in the eastern Indian Ocean, India and Australia have a history of false starts. Together as part of the Allied war mission in Gallipoli during World War I and comrades in World War II, the two drifted apart during the Cold War, with little but the game of cricket to unite them. In the 1990s, a fledging naval cooperation was discussed, but didn’t reach maturity.

When India tested a nuclear weapon in May 1998, the Australian reaction was among the strongest. As the United States and other powers—which had also criticized the Indian nuclear test—gradually mended fences, New Delhi showed no urgency in mending fences with Canberra. The following decade of tetchiness seemed to die only in 2011 when driven by strategic as well as commercial considerations, Prime Minister Julia Gillard ended the moratorium on selling uranium to India although the latter was not a signatory to the Nuclear Non-Proliferation Treaty. Of course, actually signing a safeguards agreement and concluding commercial deals remain, at best, a medium-term prospect.

While Gillard made a successful visit to India last October—inaugurating Oz Fest, the most impressive exposition of Australian soft power in India—no Indian prime minister has visited Australia since Rajiv Gandhi in 1986. There’s some hope in diplomatic circles that the Indian prime minister’s trip to Brisbane for the November 2014 G-20 summit may be converted into a bilateral meeting, possibly opening the way for a nuclear commerce agreement as well as the proposed Free Trade Agreement.

Even beyond supplying uranium, Australia is gradually emerging as a key to Indian energy security: 40 percent of coal imported by India in 2011 was from Australia. Several Indian power companies—Tata Power, GVK, and Adani Power, among others—have invested in Australian coal mining interests. Starting in 2014, India’s Petronet LNG is scheduled to extract 1.5 million tons of liquefied natural gas from the Gorgon Project in Western Australia over a 20-year period.

In addition, there’s tentative discussion about a deeper agricultural relationship that may answer some of India’s food security concerns. Consumption of cereals, pulses—a source of protein for many Indians, including hundreds of millions of vegetarians—and a dramatic expansion in consumption of dairy products consumption have sent India’s food inflation soaring in recent years. Chickpeas comprise the leading Australian agricultural export to India after wool, amounting to US$88 million in 2008–2009.

Bilateral trade has grown appreciably, from US$4.6 billion in 2003–04 to a peak of $22.4 billion in 2009–10 before declining as the impact of the global economic crisis set in. Nevertheless India is now Australia’s fourth largest export market, though still well behind China. While 5 percent of Australian exports go to India, the 2011–12 figure for China is 29 percent.

Beyond Trade

As one Australian roundtable delegate emphasized, the December dialogue was the first significant meeting of Australian and Indian strategic thinkers in years, even decades, without an external shadow intruding. As recently as 2009, random acts of violence against Indian students in Melbourne seemed to acquire a racist interpretation and became a diplomatic incident.

Yet, in July, it was announced that India had displaced China as the largest source of permanent migration to Australia, with 29,018 migrants, 15.7 percent of all migrants in 2011–12. The migrants are largely low-skilled workers and their families, though Australian authorities are increasingly targeting highly educated Indian professionals, who already form a small but wealthy cohort in the country.

More than the growth of the Indian diaspora in Australia or two-way commerce, the potential for naval cooperation and reshaping the political geography of the Indo-Pacific excites the relationship’s strategic proponents. As was anecdotally pointed out at the New Delhi roundtable, in 2014 both countries will commemorate the centenary of the intrusion into the Indian Ocean by the German cruiser Emden. The Kaiser’s World War I raider attacked Chennai, then Madras, in southern India in September 1914, before moving east toward Sri Lanka and, in today’s terminology, ASEAN waters. Two months later, in November 1914, the Emden was challenged and wrecked by an Australian naval ship, the Sydney, off the Cocos Islands.

The intelligence cooperation that led to the Emden’s destruction drew from British India’s military base in the Andaman and Nicobar Islands. Today, this is the home of India’s only tri-services command and central to its naval-capacity upgrade. As for the Cocos Islands, there’s a proposal—admittedly loose and long-term—to build facilities in this Australian territory and allow use by the United States.

The Kaiser’s Germany is no longer a challenge or even a conundrum in the Indo-Pacific, if it ever was one in the first place. Even so, as other powers, challenges and conundrums emerge in the early 21st century, India and Australia just may invoke the spirit of the effort that sunk the Emden.

Ashok Malik is a senior journalist based in New Delhi and writing on the intersection of India’s domestic politics and foreign policy. He participated in the Australia-India Roundtable of December 2012 as a representative of the Indian side. With permission from YaleGlobal Online. Copyright © 2013, Yale Center for the Study of Globalization, Yale University.

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