From UPSC perspective, the following things are important :
Prelims level : Various types of trade agreements
Mains level : Free Trade Agreement (FTA)
India and Australia have agreed to conclude a Free Trade Agreement (FTA) by the end of 2022.
What is a Free Trade Agreement (FTA)?
- A FTA is a pact between two or more nations to reduce barriers to imports and exports among them.
- Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
- The concept of free trade is the opposite of trade protectionism or economic isolationism.
Key benefits offered by FTA
- Reduction or elimination of tariffs on qualified: For example, a country that normally charges a tariff of 12% of the value of the incoming product will rationalize or eliminate that tariff.
- Intellectual Property Protection: Protection and enforcement of intellectual property rights in the FTA partner country is upheld.
- Product Standards: FTA enhances the ability for domestic exporters to participate in the development of product standards in the FTA partner country.
- Fair treatment for investors: FTA provides treatment as favourably as the FTA partner country gives equal treatment for investments from the partner country.
- Elimination of monopolies: With FTAs, global monopolies are eliminated due to increased competition.
How many FTAs does India have?
- India has signed it’s first Free Trade Agreement (FTA) with Sri Lanka in 1998.
- Likewise, India had FTAs with: Nepal, Bhutan, Thailand, Singapore, ASEAN, Japan and Malaysia.
- India has signed Preferential Trade Agreements such as:
- Asia Pacific Trade Agreement (APTA) with Bangladesh, China, India, Lao PDR, Republic of Korea, and Sri Lanka
- Global System of Trade Preferences (GSTP)
- India – MERCOSUR PTA etc. with South American countries
Back2Basics: Types of Trade Agreements
(1) Free Trade Agreement – discussed above
(2) Preferential Trade Agreement
- In this type of agreement, two or more partners give preferential right of entry to certain products.
- This is done by reducing duties on an agreed number of tariff lines.
- Here a positive list is maintained i.e. the list of the products on which the two partners have agreed to provide preferential access.
- Tariff may even be reduced to zero for some products even in a PTA.
- India signed a PTA with Afghanistan.
(3) Comprehensive Economic Partnership Agreement
- Partnership agreement or cooperation agreement are more comprehensive than an FTA.
- CECA/CEPA also looks into the regulatory aspect of trade and encompasses and agreement covering the regulatory issues.
- CECA has the widest coverage. CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
- It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and IPR.
- India has signed CEPAs with South Korea and Japan.
(4) Comprehensive Economic Cooperation Agreement
- CECA generally cover negotiation on trade tariff and Tariff rate quotas (TRQs) rates only.
- It is not as comprehensive as CEPA.
- India has signed CECA with Malaysia.
(5) Framework Agreement
- Framework agreement primarily defines the scope and provisions of orientation of the potential agreement between the trading partners.
- It provides for some new area of discussions and set the period for future liberalisation.
- India has previously signed framework agreements with the ASEAN, Japan etc.
(6) Early Harvest Scheme
- An Early Harvest Scheme (EHS) is a precursor to an FTA/CECA/CEPA between two trading partners. For example, early harvest scheme of RCEP has been rolled out.
- At this stage, the negotiating countries identify certain products for tariff liberalization pending the conclusion of actual FTA negotiations.
- An Early Harvest Scheme is thus a step towards enhanced engagement and confidence building.
From UPSC perspective, the following things are important :
Prelims level : Malabar naval exercise
Mains level : Paper 2- India-Australia relations
A few days ago, India’s Defence Minister and External Affairs Minister held the inaugural ‘2+2’ talks with their Australian counterparts.
Transforming relations between India-Australia
- Both are vibrant democracies which have respect for international laws and a belief in the equality of all nations irrespective of their size and strength.
- Both draw their congruence from a rule-based international order, believe in inclusive economic integration in the Indo-Pacific region, and face challenges from a belligerent China.
- Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison elevated their bilateral strategic partnership to a Comprehensive Strategic Partnership in June 2020.
- Growing convergence on issues: There is a growing convergence of views on geo-strategic and geo-economic issues.
- The convergence is backed by a robust people-to-people connection.
- Both countries have stepped up collaborations through institutions and organisations on many issues in bilateral, trilateral, plurilateral and multilateral formats.
- Bilateral security cooperation: Given their common security challenges and in order to enhance regional security architecture, both countries have intensified bilateral security cooperation.
- Further, elevation of their ‘2+2’ Foreign and Defence Secretaries’ Dialogue to the ministerial level emphasises the positive trajectory of their transforming relations.
- They have also stepped up security dialogue with key partner-countries to deepen coordination in areas where security interests are mutual.
- The Malabar naval exercise by the Quad (Australia, India, Japan, the U.S.) is a step in this direction.
- Partnership with like-minded countries: Beyond bilateralism, both countries are also entering into partnerships with like-minded countries, including Indonesia, Japan and France, in a trilateral framework.
- Trade ties: Trading between India and Australia has seen remarkable growth in recent years.
- Two-way trade between them was valued at $24.4 billion in 2020.
- Trade is rapidly growing and encompasses agribusiness, infrastructure, healthcare, energy and mining, education, artificial intelligence, big data and fintech.
- An early harvest agreement by December will pave the way for an early conclusion of a bilateral Comprehensive Economic Cooperation Agreement between both countries.
Issues in deeper economic integration
- High tariff on agri products in India: India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
- Non-tariff barrier in Australia: At the same time, India faces non-tariff barriers and its skilled professionals in the Australian labour market face discrimination.
Consider the question “A growing convergence of views on geo-strategic and geo-economic issues between Indian and Australia makes it imperative to forge a partnership guided by principles with a humane approach. Comment.”
The Quad has gained momentum in recent months. The time is ripe for these countries to deliberate on a ‘Quad+’ framework. The geo-political and geo-economic churning in international affairs makes it imperative for India and Australia to forge a partnership guided by principles with a humane approach.
From UPSC perspective, the following things are important :
Prelims level : Malabar Naval Exercise, Quad, 2+2
Mains level : Global alliance against China
Phase 1 of the Malabar Naval Exercise has kicked begun with the participation of Australian navy for the first time since 2007.
Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.
What is Malabar Exercise?
- It is a multilateral naval exercise that includes simulated war games and combat manoeuvres.
- It started in 1992 as a bilateral exercise between the Indian and US navies. Japan joined in 2015.
- This year the exercise will be held in two phases, the first from Tuesday off the coast near Visakhapatnam, and the second in the Arabian Sea in mid-November. Last year it was held in early September off the coast of Japan.
Major highlight: Quad Participation
- For the first time in over a decade, the exercise will see the participation of all four Quad countries.
- This will be the second time Australia will participate. In 2007, there were two Malabar Exercises.
- The first was held off Okinawa island of Japan in the Western Pacific — the first time the exercise was held away from Indian shores — and the second in September 2007.
- The following year, Australia stopped participating. Japan became a regular participant only in 2015, making it a trilateral annual exercise since then.
Why is Australia’s participation important?
- The 2+2 dialogue ended with an agreement to uphold the rules-based international order, respect for the rule of law and freedom of navigation in the international seas and upholding the territorial integrity and sovereignty of all states.
- As the standoff in eastern Ladakh continues, the participation of four large navies from the Indo-Pacific region will send a message to China.
- It was the possibility of riling up China that had prevented India from expanding the Malabar Exercise, and from Australia joining it.
Quad is an exception
- Over the last few months, the Indian Navy has conducted a number of Passage Exercises (PASSEX) with navies from Japan, Australia and the US.
- But those were basic exercises to increase operability between the navies, while Malabar involves simulated war games.
From UPSC perspective, the following things are important :
Prelims level : Quad Group
Mains level : Deterrence in Australia-China Ties
Australia and China’s cordial economic ties, established over the last three decades, have been soured this year over several points of friction.
Try this question
Q. Discuss the Quadrilateral Security Dialogue (or the Quad) and its purpose to establish “Asian Arc of Democracy”.
Various points of friction
(1) Australia’s Covid-19 inquiry
- Australia’s appeal for an independent global inquiry into the origins and initial response of Covid-19 created fury in Beijing.
- China alleged that Australia was teaming up with the US to spread “anti-China propaganda”.
(2) Tension over journalists
- The second diplomatic spat began with the detention of an Australian news anchor based in Beijing by the Chinese authorities after she was suspected of “criminal activities” that endangered China’s national security.
- The Australian government said the journalist was held under “residential surveillance” at an unknown location.
- Following this, the journalists sought refuge in Australian diplomatic missions, as they were not allowed to leave the country.
(3) Ideological issues
- The two countries have also been at loggerheads on other ideological issues previously too.
- After reports of China keeping Uighur Muslims in state-run detention camps surfaced, Australia was swift to respond and expressed “deep concern” over the “human rights situation.”
- Australia also supported Hong Kong’s autonomy cause. It decided to extend visas for Hong Kong residents.
- In both instances, China responded staunchly and asked Australia to not meddle in its “internal matters.”
(4) Economic dependence
- China is Australia’s largest trading partner in terms of both exports and imports.
- China’s share in Australia’s exports reached a record A$117 billion, or 38 per cent, in 2019, more than any other country.
- Australian sectors like mining, tourism, education benefit from trade with China. China even imports products such as milk, cheese, wine and meat.
- Over the years, it has been increasing its investment in Australian infrastructure and real estate products too.
From UPSC perspective, the following things are important :
Prelims level : Malabar Naval Exercise
Mains level : India-Australia bilateral relations
India is prepared to expand the Malabar trilateral naval exercise involving India, the U.S. and Japan, to permanently include Australia.
Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.
About Ex. Malabar
- Exercise Malabar is a trilateral naval exercise involving the United States, Japan and India as permanent partners.
- Originally begun in 1992 as a bilateral exercise between India and the United States, Japan became a permanent partner in 2015.
- Past non-permanent participants are Australia and Singapore.
- The annual Malabar series began in 1992 and includes diverse activities, ranging from fighter combat operations from aircraft carriers through Maritime Interdiction Operations Exercises.
Significance of Australia’s inclusion
- Earlier, India had concerns that it would give the appearance of a “quadrilateral military alliance” aimed at China.
- Now both look forward to the cooperation in the ‘Indo-Pacific’ and the strengthening of defence ties.
- This has led to a convergence of mutual interest in many areas for a better understanding of regional and global issues.
- Both are expected to conclude the long-pending Mutual Logistics Support Agreement (MLSA) as part of measures to elevate the strategic partnership.
From UPSC perspective, the following things are important :
Prelims level : Five Power Defence Arrangement
Mains level : Paper 2- India-Australia relations, IORA
Let’s play a game. India and this country are both members of Commonwealth of nations. Cricket, English language and Nuclear relations is something common to both of us. In fact, India was this nation’s eighth-largest trading partner and fifth-largest export market in 2018-19. The Indian diaspora in this country is now third largest and fastest growing diaspora. Any guesses?
What is a middle power?
In international relations, a middle power is a sovereign state that is not a great power nor a superpower, but still has large or moderate influence and international recognition. The concept of the “middle power” dates back to the origins of the European state system.
Plugging the big gap in India’s diplomatic tradition
- India remains preoccupied with the perennial challenges in its neighbourhood, resulting in missing out on the opportunities for productive partnerships with the middle powers.
- Thursday’s virtual summit between Prime Minister of India and the Australian premier, Scott Morrison, is an important part of Delhi’s current diplomatic effort to plug that big gap in India’s diplomatic tradition.
Let’s see what opportunities Australia holds for India
- Economic weight: With a GDP of more than US$1.4 trillion, Australia is the 13th largest economy in the world, following closely behind Russia which stands at $1.6 trillion.
- Australia is rich in natural resources that India’s growing economy needs.
- It also has huge reservoirs of strength in higher education, scientific and technological research.
- Its armed forces, hardened by international combat, are widely respected.
- Canberra’s intelligence establishment is valued in many parts of the world.
- Australia has deep economic, political and security connections with the ASEAN and a strategic partnership with one of the leading non-aligned nations, Indonesia.
- Canberra has a little “sphere of influence” of its own — in the South Pacific (now under threat from Chinese penetration).
- All these Australian strengths should be of interest and value to India.
- Jawaharlal Nehru, believed Australia is a natural part of Asia and invited it to participate in the Asian Relations Conference in Delhi in 1947, a few months before independence.
India’s nuclear test and it’s repercussions
- A political dust-up between Delhi and Canberra in the wake of India’s nuclear tests in 1998 complicated the possibilities that the end of the Cold War opened up.
- But since 2000, Canberra has taken consistent political initiative to advance ties with India by resolving the nuclear difference and expanding the template of engagement.
Comparing India and China’s approach to Middle powers
- A gap of nearly three decades between Rajiv Gandhi’s visit to Australia in 1986 and Modi’s trip in 2014 only underlines how short-sighted India’s neglect of Australia has been.
- It was exactly in these years that China transformed its relationship with Australia.
- Delhi’s temptation to judge nations on the basis of their alignments with other powers stands in contrast to Beijing.
- Beijing puts interests above ideology, promotes interdependence with a targeted middle power, turns it into political influence and tries to weaken its alignment with the rival powers.
Growing India-Australia relations
- The Indian diaspora — now estimated at nearly 7,00,000— is the fastest growing in Australia and has become an unexpected positive factor in bilateral relations.
- Common membership of many groupings like the G-20, East Asia Summit, IORA, and the Quad has increased the possibilities for diplomatic cooperation on regional and global issues.
- Other host of emerging issues — from reforming the World Health Organisation to 5G technology and from strengthening the international solar alliance to building resilience against climate change and disasters — can lend to intensive bilateral political and institutional engagement.
Geopolitics and Security cooperation
- The geopolitical churn in the Indo-Pacific, growing Chinese assertiveness and the uncertain US political trajectory open space for security cooperation.
- Over the last few years, defence engagement between the two countries has grown.
- Defence engagement is likely to be capped by a military logistics support agreement to be unveiled at the summit.
- For future, there is a need from both security establishments to develop strategic coordination in the various sub-regions of the Indo-Pacific littoral.
Eastern Indian Ocean: top priority
- The eastern Indian Ocean that lies between the shores of peninsular India and the west coast of Australia ought to be the top priority.
- This is where Delhi and Canberra can initiate a full range of joint activities.
- Joint activities should include maritime domain awareness, development of strategically located islands and marine scientific research.
Seeking trilateral cooperation with Indonesia
- The sea lines of communication between the Indian and Pacific oceans run through the Indonesian archipelago.
- Given the shared political commitment to the Indo-Pacific idea between Delhi, Jakarta and Canberra and the growing pressures on them to secure their shared waters, Modi and Morrison must seek trilateral maritime and naval cooperation with Indonesia.
Three other natural partners to expand cooperation
- Besides Indonesia, three other powers present themselves as natural partners for India and Australia — Japan, France and Britain.
- Tokyo has close ties with both Delhi and Canberra.
- Their current trilateral dialogue can be expanded from the diplomatic level to practical maritime cooperation on the ground.
- France is a resident power with territories in the Western Indian Ocean and the South Pacific.
- Paris and Canberra are eager to develop a trilateral arrangement with Delhi that will supplement the bilateral cooperation among the three nations.
Engagement between India & EPDA
- There is the less discussed role of Britain, which wants to return to the oriental seas.
- In the east, Britain continues to lead the so-called Five Power Defence Arrangement set up back in 1971, after Britain pulled back most of its forces from the East of Suez.
- The FPDA brings together the armed forces of the UK, Malaysia, Singapore, Australia and New Zealand.
- Modi and Morrison must explore the possibilities for engagement between India and the FPDA.
Try a question:
India and Australia nuclear deal was a major breakthrough in the bilateral relation. But this bilateral partnership has so much more potential in other areas. Critically examine.
It is only by building a series of overlapping bilateral and minilateral platforms for regional security cooperation that Delhi and Canberra can limit the dangers of the growing geopolitical imbalance in the Indo-Pacific.
From UPSC perspective, the following things are important :
Prelims level : Mutual Logistic Support Agreement, AUSINDEX
Mains level : Paper 2- India-Australia relations.
India-Australia relations have been growing in depth and diversity. Though two countries have been collaborating in various areas there is still potential to be realised in many areas. This article discusses the India-Australia ties. The area in which the two countries are collaborating and scope to further it.
Relations with much potential
- Mr. Modi convened a virtual multilateral summit to bring South Asia together to face the pandemic, and he also spoke online with G-20 leaders on similar issues.
- On June 4, India will have its first virtual bilateral summit with Australia.
- The convergence of interests and values has been patently obvious.
- But the time has also come to translate that potential into reality.
So, let’s see how India and Australia are expanding the scope of cooperation
- 1) The two countries have sought to reconstruct their increasingly turbulent regional geography in the Indo-Pacific and see the Quad (with Japan and the United States) as the most potent instrument to promote cooperation.
- The Quad, not surprisingly has been causing apprehensions in Beijing.
- 2) It is expected that the ‘Mutual Logistics Support Agreement’ will be signed during the summit.
- That should enhance defence cooperation and ease the conduct of large-scale joint military exercises.
- 3) Last April, Australia and India conducted AUSINDEX, their largest bilateral naval exercise.
- And there are further developments on the anvil, including Australia’s permanent inclusion in the Malabar exercise with Japan.
- 4) It may be prudent too for New Delhi and Canberra to elevate the ‘two plus two’ format for talks from the Secretary level to the level of Foreign and Defence Ministers.
Now, let’s look at the cooperation in areas that matter to the lives of the people of the countries-
1) Pandemic control through controlled adaptation: Lesson from Australia
- Australia is one of the few countries that has managed to combat COVID-19 so far through “controlled adaptation” by which the coronavirus has been suppressed to very low levels.
- Two of the leaders of this great Australia-wide effort are Indian-born scientists.
- There is much that the two Prime Ministers can share on this front.
2) Collaboration in health, safe food and supply chains
- In terms of health and safe food as well the supply chains that facilitate their delivery, there are important lessons to be learnt.
- One of Australia’s richest businessman and first patron of the Australia-India Leadership Dialogue recently described the promise of DTC-CPG (direct to consumer; consumer packaged goods) which could transform global supply chains.
- Here too there is much room for collaboration and new thinking.
3) Higher education
- The recovery of Australia’s universities, most of which are publicly funded and many rank among the top in the world, is still in question.
- But they are proving to be resilient and pioneers in distance and online learning.
- Australian universities could well open earlier than most and emerge as a safer destination for quality education than their European or Ivy league counterparts.
Consider the question “India’s relations with Australia have of late acquired a dept and diversity which is visible in their cooperation in diverse areas. Comment.”
As India and Australia with shared values try to bring about fresh order in a turbulent world, the virtual summit, in this sense, could not have been better timed.
From UPSC perspective, the following things are important :
Prelims level : Not much.
Mains level : Paper 2- International relations.
The raging fire in Australia gives provides an opportunity for India and Australia to deepen their dialogue including on energy.
Scope for the two countries
- At this moment India and Australia have a rare opportunity to translate their converging interests into a partnership.
- At Australia India Leadership Dialogue last month in Melbourne, the breadth and depth of the relationship was evident.
- As a consequence of the bushfires, the debate on global warming, climate change and fossil fuels is going to intensify in the weeks ahead.
- Environmental activism has gained ground throughout Australia.
- Indian Ocean Dipole may have triggered the drought that is related to the fires.
- The campaign against fossil fuels and the export of coal is sure to intensify.
- India and Australia are two economies with a great stakeholding in fossil fuels.
- It is critical for India and Australia to ensure that their dialogue on energy acquires momentum.
- Both countries must simultaneously strengthen the International Solar Alliance and the search for other alternative green fuels.
Common threat of China
- Leadership Dialogue also recognised that we are living through a period of immense turbulence, disruption, and even subversion.
- Presence of assertive China is the single biggest challenge to our two countries.
- In India, there is a consensus that the Australia-India relationship is an idea whose time has well and truly come.
Area of coordination
- India and Australia can work on the area of water management to trauma research to skill and higher education.
- Both the countries can also work in the area of maritime security, cybersecurity, counterterrorism,
- In a survey, Indians ranked Australia in the top four nations towards which they feel most warmly.
- Both have a strategic interest in ensuring a free, open, inclusive and rules-based Indo-Pacific region.
- Indians are today the largest source of skilled migrants in Australia.
- there is need for an early conclusion of a bilateral Free Trade Agreement.
There is a large scope for both countries to coordinate on wide issues like energy, research, security and work together for the benefit of both countries.
From UPSC perspective, the following things are important :
Prelims level : LSA
Mains level : India-Au bilateral relations
India and Australia have moved closer to closing in on the Logistics Support Agreement (LSA), as the Foreign and Defence Secretaries from both countries met in New Delhi. The LSA is one of the key agenda points during PM Morrison’s coming visit.
Logistics Support Agreement (LSA)
- The Agreement will allow the two countries to use each other’s military bases for logistics support, including food, water, and petroleum.
- The two sides carried out a comprehensive review of their strategic engagement and the regional security scenario, which is continuously evolving given China’s military expansion and economic influence.
India-Australia strategic relations
- When it comes to defence, India and Australia share a common concern over China; it is that aspect which informs a lot of the bilateral transactions between the two countries.
- While Australia is worried about China’s presence in the Pacific, India is worried about China’s increasing activities and influence in the Indian Ocean.
- Earlier this year, the Australian and Indian navies concluded a two-week-long bilateral maritime exercise code-named AUSINDEX.
- From 2016-18, the armies of the countries conducted a joint military exercise dubbed “AUSTRA HIND”.
- Significantly, for the first time in 2017, Australia’s Foreign Policy White Paper identified India as being at the “front rank” of Australia’s international partnerships.
- The informal strategic Quadrilateral Security Dialogue (QSD) that was initiated by Japan’s Prime Minister Shinzo Abe in 2007 was largely in response to China’s growing power and influence.
- Initially, the Quad” members included India, Japan, the US, and Australia; however Australia chose to withdraw since it did not want to be a part of an anti-China alliance at the time.
- For Australia to begin embroiling itself in any emerging military alliance with Japan against China, in the absence of any formal reconciliation between Tokyo and Beijing over the events of the Second World War (Nanking Massacre), was incompatible.
- However, Australia later rejoined the dialogue in 2017 on the sidelines of the ASEAN Summit, signalling a re-ignition in Australia’s interest in the dialogue.
From UPSC perspective, the following things are important :
Prelims level : AUSINDEX
Mains level : India Australia Partnership
This month was a historic moment in the India-Australia bilateral relationship. Under our joint naval exercise known as AUSINDEX, there was the largest ever peacetime deployment of Australian defence assets and personnel to India.The deepening India-Australia security relationship must be seen against the backdrop of expanding bilateral ties.
- The third iteration of our bilateral naval exercise, AUSINDEX, which has just concluded (April 2-16), builds on a fourfold increase in our defence engagement — from 11 defence exercises, meetings and activities in 2014 to 38 in 2018.
- The Indian Navy’s Eastern Naval Command hosted an impressive array of high-end Australian military hardware, including the Royal Australian Navy’s flagship, HMAS Canberra and the submarine, HMAS Collins.
- The Canberra is the size of a small aircraft carrier. She can carry over 1,000 troops and 16 helicopters. These vessels were joined by frigates, aircraft and around 1,200 sailors, soldiers and airmen and women.
- As well as being Australia’s largest defence deployment to India, the exercise was the most complex ever carried out between defence forces. For the first time, navies undertook anti-submarine warfare exercises.
- And in a similar show of trust and cooperation, Indian and Australian maritime patrol P-8 aircraft flew coordinated missions over the Bay of Bengal.
Mark of greater alignment
1.Shared Values –
When Australia’s Foreign Minister, Marise Payne, visited India earlier this year, in January, she emphasised on shared outlook as free, open and independent democracies, as champions of international law, as supporters of an open and inclusive Indo-Pacific and as firm believers that ‘might is not right’.
2.Indo- Pacific Region –
- A key element of Australia’s Indo-Pacific strategy is partnering with India in the vibrant Indian Ocean Region.
- India is a leader in this region and Australia is a natural partner for addressing shared challenges.
- Together they must continue to work together to combat transnational crime, terrorism, people smuggling, and illegal fishing, in order to enjoy a peaceful and prosperous Indian Ocean Region.
3. Indian Ocean Concerns – As the nation with one of the longest Indian Ocean coastlines and with more than half of our goods trade departing Indian Ocean ports, Australia is committed to addressing humanitarian and environmental challenges inIndian Ocean neighbourhood.
Australia’s initiatives in Pacific –
- Development Aid- In November 2018 Australia announced the Australian Infrastructure Financing Facility for the Pacific. This AU$2 billion initiative will boost Australia’s support for infrastructure development in Pacific countries.
- Security Relationship –Australia will establish a Pacific Fusion Centre to provide real-time surveillance data for countries across the region as well as enhancing policing and military training both bilaterally and through regional centres.
- Australia is building diplomatic and economic relationships with Southeast Asia to build resilience and prosperity in region.
- The recently announced Southeast Asia Economic Governance and Infrastructure Initiative, worth AU$121 million, will help unlock Southeast Asia’s next wave of economic growth.
- All this activity is happening against the backdrop of a rapidly expanding India-Australia relationship.
- People-to-people and economic links are on the rise.
- The Indian diaspora in Australia is both strong and growing.
- One in 50 Australians today was born in India; almost 90,000 Indian students studied in Australia last year; and over 350,000 tourists visited Australia from India in 2018.
- We are working together to see India become a top three trading partner for Australia by 2035.
- So on the one hand, we should welcome the successful AUSINDEX exercise as a step up in our strategic partnership.
- At the same time, we should recognise it also as the natural next step in a friendship between Australia and India that is marked by growing trust, understanding and camaraderie.
India & the Oceans
It is analytically sensible to divide Australia’s links to post-Independence India into four phases:
The first corresponds to the years immediately surrounding Indian Independence when Labour Party was in power in Australia.
The second period is the Menzies Years,
The third may be regared as the post 1971 re-discovery of India and
The last is the current engagement with emerging India. While the first three periods correspond largely to changes of party in power in Australia, the most recently is largely bipartisan.
Phase-I: India’s Independence and Australia
When India became independent in 1947, Australia’s relations with India under labour party, which remained in power until 1949, were close and sympathetic. At India’s invitation, two representatives from Australia participated at the 1947 Asia Relations Conference held in New Delhi.
Reports presented by the two delegates back to the Australian government noted little negativity in the relationship, although the question of restrictions on immigration was raised during the conference.
Phase II: Nehru and Menzies: The Doomed Legacy of a Clash of Dominant Personalities
What emerges in striking fashion from the interpretations of a number of the studies of the first two decades after India’s Independence in 1947 is the argument that relations in those formative years pivoted around the strong personalities of Sir Robert Menzies and Jawaharlal Nehru. Menzies, an anglophile Empire Loyalist, thought India was not yet fit for self rule, he regretted the passing of the White Commonwealth of the 1930s and decried India’s unwillingness to offer loyalty to the Crown in the changed post-colonial Commonwealth.
It was not until India’s border clashes with China in 1962 that the two nations were firmly on the same side of a major international crisis.
A difference in approach to security soon emerged after 1947, while Australia hoped to establish a regional security arrangement which included India, India expressed no interest in the proposal. Australia’s growing alignment with the USA in the emerging Cold War virtually removed any possibility of bilateral defence cooperation. There were several other issues on which the two countries differed including Australia’s Trusteeship position in Papua New-Guinea and the clash between India and Pakistan over the accession of Kashmir.
Phase III: relations 1971-1998 – Silence Punctuated by Occasional Hiccups
In these years, the Australian government has paid considerable attention to India both as a security threat and as a potential trading partner. One of the early manifestations of the ‘renaissance’ of interest was the establishment of the Indian Ocean Center for Peace Studies at the University of Western Australia in 1990.
This may well have been a response to emerging concerns in the late 1980s over the build-up of India’s defence forces, especially the extension of its naval capability. So, too was a pioneering report by the Senate Standing committee of Australia on Foreign Affairs, Defence and trade. Some of the testimony to the committee utilized a distinctly alarmist tone about Indian intentions in the Indian Ocean. The National Council of the Australian
Defence Association for example, in their submission to the Committee expressed their fears that India might use its new naval capabilities to annex Australian territory in Cocos Islands.
Another ‘hiccup’ in the India-Australia relationship also arose in the sphere of Defence when in 1990 Australia sold 50 mothballed Mirage III jets to Pakistan during a period of heightened tension over Kashmir.
Whereas, India’s neglect of the Australian relationship can most usefully be seen as part of its broader neglect of its relationship with Asia in the years before the adoption of the ‘Look East’ policy. The collapse of the principal structure of Indian Foreign Policy which followed the implosion of Soviet Union in 1989 led the country to give serious attention to its relationships with the countries of Southeast Asia and North Asia.
Phase IV: Nuclear Bombs and Terrorist Threats
The India-Australian relationship that had shown a degree of warmth in the 1990s with the publication of several reports containing recommendations for further strengthening the relationship dipped fast in the wake of India’s nuclear testing in May 1998.
Prime Minister John Howard condemned it saying it was an ‘ill-judged step’ that would have damaging consequences for security in South Asia. Canberra also withdrew its High Commissioner from New Delhi and imposed severe sanctions on India along with severing all defence ties with the country.
With the US attitude softening towards India, especially as the US President Bill Clinton visited India in March 2000, Canberra also began to warm up to New Delhi. As the reality that India was a nuclear power state hit the world and Canberra, politico/security ties began to be restored slowly and upgraded vastly in post 9/11 security environment.
In post 9/11 environment, a Memorandum of Understanding on Cooperation in Combating International Terrorism was signed in August 2003 followed by a Memorandum of Understanding on Defence Cooperation in 2006.
In the recent past, the Navy of Australia along with Japanese Navy had also been invited to participate in Malabar Exercises conducted between Indian and US Navy.
Immigration Issue and Indian Diaspora
The past decade has seen a large increase in Indian migration to Australia. In 2011-12 only, 29,018 Indians became permanent migrants, the highest such number from any one country. Fellow democracies with shared values, concerns and interests and now a growing community-centric relationship, India and Australia should have strong similarities. As flanking states in the eastern Indian Ocean, for example, they are critical to an emerging arena of geopolitics.
Students from India are pursuing undergraduate/post-graduate studies, research and special courses at all leading universities, including University of Melbourne, Monash University, RMIT University, La Trobe University, Swinburne University Victoria University and Deakin University.
Indian students are also undertaking courses at different vocational training institutes and colleges in a range of areas, including accountancy, finance, community service, child care and aged care, etc.
The number of immigrants in Australia from India remained small until the middle of the 20th century when the aftermath of the Second World War and India’s Independence resulted in a spate of immigration of nonethnic India-born British and Anglo-Indians.
Since 1966, the relaxation of racially based immigration policies in favour of educational and professional qualifications and the English language opened the doors for many professional ethnic Indians as well as migrants of ethnic Indian background from many countries outside India, like Fiji, Singapore, Malaysia, Sri Lanka, Uganda, Kenya, Tanzania, South Africa and Britain.
Compared to migrants from other Asian countries, the India-born migrants have remained a distinctive group, forming the largest proportion of ‘skilled migrants’ rather than ‘family migrants’. Unlike the 19th century settlers, later migrants are a highly urbanized group, occupying one of the highest levels of educational training and qualifications of any group in Australia.
Trade between Australia and India dates back to late 18th century and early 19th century When coal from Sydney and horses from New South Wales were exported to India. As of 2010, bilateral trade between the two countries totaled US$ 18.7 billion, having grown from US4.3 billion in 2003. This is expected to rise to touch the mark of US$40 billion by end of year 2016.
Trade is highly skewed towards Australia. India is Australia’s tenth largest two-way trading partner, with a total volume of AUD$11.9 billion in 2013. India is Australia’s fifth largest export market, with coal, gold, copper ore and concentrates and agricultural products among Australia’s major exports, while India’s chief exports are pearls, precious and semi-precious stones, textiles and clothing. Over 97,000 Indian students enrolled in Australia in 2008, representing an education export of AUD2 billion.
Issue of Nuclear Cooperation
Supply of uranium to India has become a huge political issue in the Australia-India bilateral relationship. After a civilian nuclear technology deal signed between the United States and India in 2006, pressure on Australia to consider supplying uranium to India grew from different quarters, but most notably from India.
Then Prime Minister John Howard resisted the pressure by asserting that Australia’s policy was not to supply the yellow cake to a country that has not signed the nuclear Non-Proliferation Treaty (NPT).
Some commentators criticised Australia’s hypocritical approach to the issue. They ask how Australia justifies its policy of exporting uranium to China which, though it is a signatory to the NPT, is a known proliferator as Beijing has reportedly supplied nuclear technology and materials to North Korea and Pakistan, states run by autocrats and military dictators, and has nuclear ties with Iran.
On the other hand India claims it has never proliferated nuclear weapons or technology to a third party despite not signing the treaty due to its discriminatory nature.
Providing access to Communist China and withholding such access to India, the world’s largest democracy does not go down very well among many commentators and officials in India.
Under pressure Howard later changed his tune by accepting that India’s behaviour as a nuclear weapons state had been ‘impeccable; since the country first exploded a nuclear device in 1974’. In August 2007 he announced that Australia was willing to sell uranium to India under strict conditions and Howard communicated his decision to his Indian counterpart.
The agreement would have allowed Australian nuclear inspectors to ensure that the uranium was used only for the power generation purposes. Then in Opposition, Kevin Rudd had vowed to “tear up” any nuclear deal with India if he won government.
Soon after it came to power, the Rudd Labor government reversed Howard’s decision and announced in January 2008 that Australia would scrap the deal that was signed by the Howard government in August 2007 concerning the sale of uranium to India on the grounds that India was not a signatory to the NPT, reverting to Australia’s long-held stance on the issue.
The volte-face by the Rudd administration on the sale of uranium to India came as a significant blow to India’s energy security needs especially as Australia holds the world’s largest known reserves of uranium, approximately 40% of the total worldwide supplies.
It is not just the Indian strategists who have criticized Rudd’s reversal of Howard’s policy on legal, political, strategic and pragmatic grounds but in Australia, too, politicians on the opposite side in federal parliament have ridiculed Rudd’s reversal policy.
Finally the issue settled only in late 2011 when Prime Minister Julia Gillard overcame opposition from domestic anti-nuclear lobbies and agreed to sell uranium to India.
The recent visit by an Indian Prime Minister, after a gap of nearly 30 years (Rajiv Gandhi in 1986), for the G20 Summit in Brisbane, and then his travel to Canberra for an official bilateral visit comes at a critical time for both countries – when strategic equations are being redrawn, creating new Asian security dynamics.
There was a palpable excitement in India when Prime Minister Narendra Modi jetted off to attend the G-20 summit at Brisbane. This was partly because of the announcement that the PM would be embarking on a bilateral tour of Australia at the completion of the meeting of world leaders, and that he would be addressing the Indian Diaspora in Sydney the very next day, in what was a much anticipated recreation of the Madison Square Garden moment in New York. With only one difference, this time, the gathering of Indian Diaspora was expected to be much more than that was witnessed in Madison Square.
Other than this, a number of issues came up for discussion, but one that topped the strategic agenda was “maritime security.” Ever since Canberra officially declared its interests in the Indian Ocean last year, there has been speculation in the strategic community about an evolving maritime coalition in the Indian Ocean Region (IOR). Indeed, Australia has in recent years sought to strengthen its nautical posture in the Indian Ocean, reviving its ties with regional states. It is, however, the vigorous pursuit of its relationship with India that has provided evidence of Canberra’s desire to play a larger security role in the IOR, which this time got well promoted by the personal chemistry of the two Prime Ministers.
In spite of these expected developments, what came out to be most important point of this foreign visit was, the announcement of the next logical step to India’s famous ‘Look East’ Policy, i.e., the ‘Act East’ Policy (a more action oriented strategy, aimed to bolster cooperation with ASEAN in specific and East Asia in General).
The Prime Minister announced this Policy at the East Asia Summit held in the Myanmarese Capital city of Nay Pyi Taw. “Look East” was introduced in the early 1990s by Sri PV Narasimha Rao. It was endorsed by former Prime Ministers Atal Bihari Vajpayee and Manmohan Singh.
There has been a serious criticism that India has only been ‘looking’ eastwards, but not pursuing a comprehensive strategy towards Southeast Asian countries, and the ASEAN.
Today, there is a conscious effort by the foreign ministry not only to ‘look east’, but also to ‘act east’ i.e., to create a more action oriented strategy in harnessing the fruit of development by engaging with East Asia.
Therefore, India’s bilateral relations with specific countries in Southeast Asia, and its interaction with the ASEAN; along with multiple other regional organisations and initiatives including the ARF and the EAS, highlight its ‘act east’ strategy.
Along with India moving into Southeast Asia, New Delhi should also take serious measures in bringing the countries east of India close to India – within the prism of economic, cultural, and societal fields
On economic and trade relations, not all countries to India’s east will have an interest or sufficient capacity to invest in the country but specific nations could be identified, and efforts could be made to attract investment from them. This investment need not necessarily be directly in context of the economic field, but could also cover other sectors such as education and tourism. While Japan, Korea, and Singapore may have adequate resources to invest economically in India, countries like Australia can be approached to invest in education and other sectors.
New Delhi should also approach other countries in Southeast Asia and East Asia to come to India; historical linkages, tourism, and religion can play a crucial role in attracting some of the countries in the east, starting from Myanmar including Thailand, Indonesia, and Cambodia. An example will be the huge asymmetry between India and Thailand, or India and Cambodia in terms of movement of people.
Since the end of the Cold War, the India-Australia relationship has had several false starts. Maritime cooperation was being discussed in even the early 1990s but accidents intervened – Canberra’s overstated response to the Indian nuclear tests of 1998; a decade later, the clumsy dismantling of the Quadrilateral (the fledgling partnership between the two countries and the United States and Japan); the uranium issue, settled only in late 2011 when Prime Minister Julia Gillard overcame opposition from domestic anti-nuclear lobbies and agreed to sell uranium to India.
Both countries need to be watchful, lest this history becomes an all-purpose excuse for not showing diplomatic urgency. Neither should problematic episodes become triggers for extreme interpretation. For example, it would be unfair if the legal quagmire and payment delays, Australian contractors have faced, often for no fault of their own, following the 2010 Commonwealth Games in New Delhi were to influence the entirety of Australian business perception of opportunities in India.
For Australia, the Indian establishment’s dexterity with the English language has been appealing but also misleading. “In the view of some Australian scholars of India,” a Australia-India Taskforce report says, “the elite’s fluency in English has acted as a barrier to deeper Australian familiarity with the country, creating the illusion that understanding Indian languages and culture – unlike their Indonesian, Japanese and Chinese equivalents – is unnecessary”.
Likewise, the street violence against Indian students in Melbourne and other cities in 2009-10 was deplorable but cannot take away from the fact that Australia remains a welcoming home for thousands of Indian migrants. Authorities in Australia have responded by cracking down on dubious educational institutions, and facilitating those students genuinely seeking education.
From India’s energy security to its food security, intelligence sharing on terrorism to joint exercises of Special Forces, naval and anti-piracy coordination to constructing a new architecture for the Indo-Pacific (the confluence of the eastern Indian Ocean and the western Pacific), the canvas for Canberra and New Delhi is vast. It awaits an overarching doctrine for India’s Australasia thrust, and political ownership in New Delhi of such a doctrine.
India- Australia nuclear deal
- India and Australia signed the civil nuclear deal in September 2014.
- India and Australia announced completion of procedures for India Australia Civil Nuclear Agreement. With the completion of procedures, including administrative arrangements, the India Australia Civil Nuclear Agreement will enter into force.
- With this move, India becomes the first country to buy Australian uranium without being a signatory to the international nuclear non-proliferation treaty (NPT).
- The deal underlines the deepening strategic ties with Australia.
- Australia has about 40 per cent of the world’s uranium reserves and exports nearly 7,000 tonnes of yellow cake annually.
- The bilateral trade between India and Australia, estimated at $15 billion.
- To strengthen bilateral trade and investment, both counties agreed to conclude a Comprehensive Economic Cooperation Agreement (CEPA) by the end of the year.
- Australia is pushing for tariff reduction in dairy products, fresh fruit, pharmaceuticals and wines. India wants zero duty on automobile parts, textiles and fresh fruit. India has also demanded greater access in the services sector.
- India –Australia both borders the Indian Ocean and has a shared interest in the maintenance of freedom of navigation and trade.
- Australia recognises India’s critical role in supporting security, stability and prosperity of the Indian Ocean region.
- Australia and India are committed to working together to enhance maritime cooperation, first formal
- bilateral naval exercise (AUSINDEX) held off the coast of Visakhapatnam in 2015.
- People-to-people links through personnel and training exchanges have proved vital to building familiarity between our defence forces.
- India and Australia cooperate in various multilateral fora. Australia supports India’s candidature for a
- permanent seat in an expanded UN Security Council.
- Both India and Australia are members of the Commonwealth, IOR-ARC, the ASEAN Regional Forum, the East Asia Summit and the Asia-Pacific partnership on climate and clean development. In 2008, Australia became an observer in the SAARC.
INDIA AND NEW ZEALAND
President Pranab Mukherjee paid his first official visit to New Zealand. Mr. Mukherjee’s is the first ever presidential visit from India to New Zealand.
Outcome of visit
- President talked about cooperation in agriculture, dairy, food processing, education and skill development as well as high technology between the two countries.
- During the course of the visit, India and New Zealand also signed a deal that opens the door for direct flights between the two countries with an aim to boost tourism and trade sectors.
Significance of New Zealand
- Trade: Bilateral trade between India and New Zealand stood at $ 885 million in 2015, of which Indian exports accounted for $ 429 million in 2015. There is ample scope to enhance bilateral trade. Both countries are in process to finalize free trade agreement (FTA).
- Indian diaspora: New Zealand is home to more than 170,000 people of Indian origin.
- Opportunity for skilled migrants from India who can contribute to New Zealand’s economy
- Higher education: Indian students constitute the second largest number of foreign students in New Zealand.
- New Zealand supports India’s aspirations for permanent membership of the UN Security Council.
- New Zealand has great technological abilities in cold storage supply chain management and post—harvest technologies, which are of interest to India.
- Two nations have “shared stakes” in a peaceful Asia-Pacific region and can successfully work as partners in promoting security and stability there.
- New Zealand is important country for India’s ‘Act East’ policy.
- New Zealand has strong influence of the Pacific Island countries
India and Pacific Islands
What are Pacific Island Nations (PINs)?
- These are 14 island countries in Pacific Ocean – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu
- These countries range in land area from the largest Papua New Guinea (461,700 sq km) to the smallest Nauru (21 sq km)
- The size of their population ranges from Papua New Guinea (7.7 million) to Niue (1,500)
- Development indicators also vary widely with per capita income ranging from USD 27,340 (Cook Islands) to USD 1020 (Papua New Guinea)
Why study about PINs?
- On August 21, 2015 India hosted the second edition of Forum for India-Pacific Islands Cooperation (FIPIC) summit in Jaipur
- All the 14 nations of the group participated in the summit
- So obviously, this becomes an important topic for exam and you cannot ignore this as an unimportant grouping
Importance of the Pacific area:
- Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation
- The Pacific Ocean is the earth’s largest ocean covering 46% of water surface and 33% of the earth’s total surface, making it larger than the entire earth’s land area
- It is bounded by 41 sovereign states plus Taiwan, and 22 non-independent territories
- It is rich in marine resources and accounts for 71% of the world’s ocean fishery catch
- The Pacific has for long been an area of geostrategic interest for countries such as the US, Japan, China, Russia, Australia, and Indonesia – large economies which lie on its boundary
- Two developed Pacific Island countries – Australia and New Zealand – have tended to dominate regional cooperation forums such as the Pacific Islands Forum (PIF)
Issues with PINs:
- They are dispersed and low populated countries
- They have logistics problems to develop their economies
- Less manufacturing activity
- With climate change and global warming, these countries fear of being drowned or disappeared
- Their natural resources are being depleted day-by-day – sugar, timber etc.
- India used to import phosphates from the Nauru Island, which is now being depleted
- Problems in sugar market due to global vagaries
#1. Australia: These countries are highly influenced by Australia due to its close proximity – for example, Australia helping the development of natural gas of Papua New Guinea etc.
- China has significantly expanded its foothold in the region, from increasing business and trade ties to setting up diplomatic missions in each of these countries
- More than 3,000 Chinese companies are already operating in these Island groups in various businesses.
- China is now the largest bilateral donor in Fiji and the second largest in the Cook Islands, Papua New Guinea, Samoa, and Tonga
- Last year, China provided around $2 billion credit to these nations collectively
6 out of 14 Pacific Islands recognize Taiwan as a legitimate govt of China
- Taiwan is already holding annual meet with these countries to engage them
#3. These island groups are forming partnerships with EU and other economic groupings
Where can India engage?
#1. UNSC: These 14 nations are supporting India’s attempts to become permanent member of UNSC
- These are agriculture oriented economies
- Major products- palm oil, sugar, and timber
- We can do value addition to their products- copra, sugar, timber
- They are diversifying in oil production and we are short on edible oil so this is a major area to work on
- India can make use of the mahogany (timber) that is extensively grown in these islands, for getting raw materials for paper industry
- These islands have plenty of oil, gas, and minerals in their sea beds
- For example, the Kiribati islands, they are spread over an area that is bigger than the Indian subcontinent and have rich sources of minerals
- India can form joint ventures and explore these minerals
#4. Disaster Management: These islands are frequently affected by natural disasters like typhoons, earthquakes etc. India can help them in disaster management
#5. Services sector:
- The other biggest potential area which India can leverage from these islands is the development of services sector – IT, tourism, healthcare and fisheries
- We can explore tourism options to these isolated beautiful spots
- Tourism also has an advantage from the fact that there are large number of ethnic Indians in these islands
- Many of these countries send their nationals to India for education though programmes sponsored by the Indian Council of Cultural Relations
- India is developing renewable energy and has set a target of 175 GW by 2022. It can help the Pacific Islands in this area and provide energy security
- We can transplant our experience of A&N islands in establishing isolated energy grids in these countries
- There has been lot of tree cutting for industrialisation and they are using more diesel for power. We can help them by providing assistance in renewable energy
- In the past, these pacific islands have faced a threat to democracy
- For example- there was a coup in Fiji which overthrew the democratically elected government, there was a civil war in Papua New Guinea
- In this context, India can serve as a stable and solid partner, as it is one of the largest democracies in the world, so that these islands can have an assured trade and investment relations.
- Unlike other proximate countries like Australia, India has intimate relations, going beyond exploration of natural resources, with these nations
- Culturally they are linked to India. For example, Fiji has huge number of Indian ethnic population
- We should leverage this advantage to engage & establish more intimate relations
#9. Climate Change: India should fight for their cause in the coming UN Climate Change meetings & should see to it that these islands get enough finances for disaster mitigation
#10. The Pacific Island groups have enthusiastically welcomed India’s offer in telemedicine, tele-education, space cooperation, fostering democracy and community activities
#11. These countries are in need of MSME and we have good experience in developing them
- The Forum for India–Pacific Islands Cooperation (FIPIC) was launched during PM’s visit to Fiji in November 2014
- FIPIC includes 14 of the island countries – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu
- Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation.
- India’s focus has largely been on the Indian Ocean where it has sought to play a major role and protect its strategic and commercial interests
- The FIPIC initiative marks a serious effort to expand India’s engagement in the Pacific region
- At this moment, total annual trade of about $300 million between the Indian and Pacific Island countries, where exports are around $200 million and imports are around $100 million
- This is a part of India’s extended Act East Policy
#1. Suva, Fiji:
- One of the key outcome of the first summit in Suva, Fiji was that top leadership of both India and Pacific Islands decided to meet at a regular interval and an annual summit was instituted in this regard
- Other areas- visa on arrival for their nationals, funds for small business, line of credit for a co-generation power plant for Fiji, and a special adaptation fund for technical assistance and capacity building for countering global warming
#2. Jaipur, India:
Source: Economic Times
- India announced to convene international conference on blue economy in New Delhi in 2016 and invited all the experts form the island nations
- Set up Space Application Center, in partnership with ISRO, in any of the 14 countries and friendly port calls by the Indian Navy
- Pacific leaders have expressed their concerns over climate change and its effect on their respective counties. India also assured them to voice their concerns and appropriate measures at the 2015 United Nations Climate Change Conference (COP 21) in Paris
- In return all the 14 visiting head of state/government reiterated their support to India’s bid for a permanent memberships at the reformed United Nations Security Council
- India offered to help the Pacific Islands with their hydrography and coastal surveillance, by engaging the Indian Navy. It would help them have a better understanding of their maritime zone and strengthen security of their EEZs
- India also announced FIPIC Trade Office at Federation of Indian Chambers of Commerce & Industry (FICCI) to promote Trade & Investment opportunities between India & Pacific Island Countries
- China is already on there and giving large credit, so does it mean India can not build good relations with these nations? No
- We need to build on our advantages- health tourism, building democratic institutions which they need a lot
- India’s strong relations with Fiji, which has considerable influence in the region, is a strong point which could help counter the growing Chinese influence
- Relations with Fiji had improved in India’s favour in the past decade and not only those of Indian origin but also Fijians were friendly towards Indians, which worked to Indian advantage
- Most of the economies in the region are based on agriculture, fisheries and small-scale industries and India’s capacity in these sectors is even better than Europe and China
President visit to Papua New Guinea
President Pranab Mukherjee paid first official visit to Papua New Guinea. This was the first ever visit by an Indian Head of State since India established diplomatic ties with the country in 1975.
Highlights of the President visit
- India and Papua New Guinea signed four Memorandum of Understanding (MoU)s in the areas of agriculture, health, information technology and infrastructure.
- India agreed to provide a line of credit of $100 million to Papua New Guinea for infrastructure projects and signed a pact to set up a ‘Centre of Excellence’ in information technology.
- India is looking to explore and develop Papua New Guinea’s vast oil and gas resources through joint ventures and investments.
- Papua New Guinea reiterated its support for India’s claim for permanent membership in the UN Security Council and agreed to expedite a proposed Bilateral Investment Promotion and Protection Agreement (IPPA) to facilitate investments. It announced visa-on-arrival facility for Indian tourists.
- FIPIC, the Forum for the India-Pacific Islands Cooperation, a multilateral forum launched by Prime Minister Narendra Modi in November 2014.
- India considers its cooperation with the islands of the Pacific to be a key component of ‘Act East’ policy’.
INDIAN OCEAN REGION
INDIA-INDIAN OCEAN REGION (IOR)
The Indian Ocean covers at least one fifth of the world’s total ocean area and is bounded by Africa and the Arabian Peninsula (known as the western Indian Ocean), India’s coastal waters (the central Indian Ocean), and the Bay of Bengal near Myanmar and Indonesia (the eastern Indian Ocean).
- It provides critical sea trade routes that connect the Middle East, Africa, and South Asia with the broader Asian continent to the east and Europe to the west.
- A number of the world’s most important strategic chokepoints, including the Straits of Hormuz and Malacca.
MARITIME SECURITY AND CHALLENGES IN
THE INDIAN OCEAN REGION
‘Terrorism and piracy’, these two headings have taken centre stage particularly due to the impact on mercantile marine trade that is coming under increased pressure as they traverse through high risk areas.
There is enhanced awareness that Indian Ocean is the focus of the world due to the growing of economies and the dependence of these economies on the sea routes for development and security. So when the security challenges in the Indian Ocean is discussed issues of security which are distinctly different from the conventional security mould has to be discussed. The reference is to do with fisheries and livelihood security, environmental security, search and rescue, marine pollution and other such non glamorous issues.
The Pivot to Asia – US Policy Shift
The recalibration of the US policy which has orchestrated a policy of pivot to Asia has its own ramifications in the region.
With the rise of China and its increased assertiveness, US appears to be engaging with Asian countries in all spheres. In addition to the traditional partners in the Asia Pacific, namely, Japan, South Korea, Phillippines, Australia, New Zealand and other countries, there has been greater engagement in South Asia particularly with India.
If Pakistan despite all the differences is still considered a reluctant tactical ally in the war against Taliban in Afghanistan, India is being looked at as an important future strategic partner with enhanced interaction in many spheres, notably in defence and energy security.
South China Sea- Issues of Mistrust and CBM- ASEAN
The east west traffic that passes from the South China Sea to the Indian Ocean and vice-versa must pass through the Straits of Malacca till alternate routes are proven. The spin offs of this aggressive posturing will see the ripple effects in the Indian Ocean which provides the linkages to forces that may be interested in accessing the hot spots through the Malacca Straits. From the point of China, as a nation which carries most of its goods on its own shipping fleet, it would be definitely concerned about and security of its vessels which are moving through the Indian Ocean.
Growing Economies in the Region and their Interplay
The increased economic engagement has provided capable and strong economies such as China to increase their share of investments in various mega projects and infrastructure in many countries around the world in general and the Asia Pacific in particular.
The classic examples are about China’s investment in Gwadar in Pakistan, Hambanthota in Sri Lanka, Sitwe in Myanmar, and Chittagong in Bangladesh. While the initial intent is economic engagement; it is clear that such investments are not purely commercial. China in return will expect to be supported in its hour of need to turn round and logistically support its naval units which have increased interest in the Indian Ocean Region.
The challenge for South Asia and particularly India is to mange this Chinese advances in to the Indian Ocean and prepare for surprises.
After the devastating effect of tsunami in India and our neighbourhood, India and others have initiated various measures for setting up warning systems and also to have mechanisms for disaster management.
The Tsunami last year in Japan has only brought out the vulnerability of the total system when faced with natural disasters of the magnitude faced at that time coupled with human/technical failures. The need therefore is for drawing up robust contingency plans and to bring in all the players from the region that would earmark units and rehearse their role at national and regional levels during both man-made and natural catastrophe. This will constitute a greater challenge in times of calamity due to cultural, linguistic and procedural differences.
Piracy off the Coast of Somalia
The incidents of piracy went up phenomenally between 2008 and 2011 by adventurous pirates, supported and backed by land based sophisticated teams that are running the enterprise on a business model.
The estimated cost of piracy is in the region of 7 to 11 billion of US dollars annually. Due to sustained efforts by the navies of the world and other deterrent actions by ships, the first half of 2012 has seen a noticeable dip in the number of attacks and has also brought down the number of sea farers held hostage.
However, the world has not seen the end of piracy and sustained efforts are still necessary. A lot more effort is needed in Somalia where the root causes lie. The bearing on the Indian Ocean Region is the increased presence of extra regional players who are present in large numbers. This has facilitated coordinated action by some of the western navies though; there are still a large number of navies who are operating independently in a loose structure.
The initiative to get China, India, South Korea and Japan to work together is a welcome sign that will enable the navies of the Asia Pacific to work together and learn to operate together.
Neighbourhood Issues and Terrorism
The challenges of preparing for preventing acts of maritime terrorist activity have become acute following the Mumbai terror attacks in November 2008. The seaborne terrorists who landed in Mumbai killed over 166 innocent civilians including foreigners.
A slew of measures implemented include placing the Navy at the apex of the maritime security architecture, commissioning of the National Automatic Identification System (NAIS), use of light houses for fitting radars to provide seamless information to the Joint operation rooms, equipping and training the fishermen to be the eyes and ears of the fleet, establishing of Vessel Traffic Management Systems, installation of Long Range Identification and Tracking (LRIT) radars, revamping of the intelligence apparatus to bring about greater degree of coordination amongst the multiple agencies operating in the same medium, The commissioning of the National Intelligence Agency to investigate and prevent acts of terrorism, the setting up of regional hubs for National Special Group of commandos, setting up of the National Technical Research Organisation (NTRO), creation of two new CG commands in Gujrat and West Bengal, commissioning of new Coast Guard Stations and Coastal Security Groups manned by the State Maritime Police, induction of additional Air Cushion Vehicles for the Coast Guards, commissioning of additional naval stations in the island groups on both flanks, conducting of regular table top and real time exercises including all the stake holders and such other measures.
Despite the initiation of all the above measures, there is still a lot to be done to have a robust maritime security architecture that will prevent surprises at sea by proactive action and cooperation with other agencies.
Energy Routes – SLOC Vulnerability; Malacca Straits/Straits of Hormuz dependence
The growing economies depend on the seas for getting coal, oil, gas and other energy products to sustain their economies. This also brings in the threat of these vessels and products being targeted by both pirates and Non State Actors.
The example of China, India, Australia, Malaysia, Japan, South Korea and others from the region who have dispatched warships to protect the international shipping operating in the global commons is a clear indication that the security challenges would grow manifold.
The close proximity of ships from different nations also needs to be managed by a sound architecture that does not allow mistakes and misunderstandings during normal patrol missions. The challenge therefore is for establishing clear cut operating procedures, protocols and communication methods to prevent incidents while engagement in peace time missions becomes critical.
The Straits of Hormuz and the Red Sea on the west and the Malacca Straits on the east of India are critical arteries that facilitate the free flow of goods both ways. With the constant increase in the number of vessels going up each year issues of traffic separation, monitoring the traffic for both safety and security would engage the attention of the planners.
There would be greater use of technology to facilitate establishing of CISR architecture. There are issues of financing and funding of such means and methods for protection of the globally common issues. The Straits of Hormuz is on boil with the increased presence of US ships and the threat of an all out war with Iran.
In the past, Iran has threatened to close down the Strait of Hormuz and has challenged US as a result of the spat over the nuclearisation of Iran. Any such action by Iran will precipitate stern action by US and its allies and will lead to a war in the Straits that supports global traffic.
The resultant inevitable disruption of the transportation chain will have serious ramifications for the countries that are dependent on the supply of products through the Straits of Hormuz.
Fisheries and Livelihood Issues
The period after the defeat of the LTTE has seen increased incidence of the Indian fishermen coming in to conflict with their counterparts in Sri Lanka and also with the SL Navy. There have been allegations and counter allegations about use of excessive force and even fire arms to prevent fishermen from poaching.
From the Indian fishermen point of view, historically, the contested waters belonged to India and they have every right to fish in the traditional waters. Having demarcated the maritime boundary with Sri Lanka in 1974, wherein, Kacchativu was gifted to Sri Lanka, the Indian fishermen have been debarred from fishing around that rich fishing grounds around that Island leading to skirmishes and incidents.
It is not that only Indian fishermen are guilty of tresspassing, the Indian Ocean has witnessed intrusions by fishermen of Pakistan, Bangladesh, Thailand, Myanmar and Sri Lanka who do cross in to each other’s territory while looking for fish. This will remain a great challenge with security overtones.
With dwindling stocks, and irresponsible fishing in different parts of the world, conflicts and clashes would be the order of the day and there is a need to resolve this by bilateral agreements and joint monitoring of the areas allocated for fishing.
The Coast Guards or their counter parts in this part of the world will need to work out modalities to ensure that the situation does not go out of hand. The establishing of a hot line some years ago between the Coast Guard Headquarter in India and the Maritime Security Agency in Pakistan has helped in ensuring that the fishermen are not detained unnecessarily in the garb of security. Similar arrangements are required with other maritime neighbours.
With some of the recent incidents of collision and grounding particularly off Mumbai, the fragile fishing grounds and Indian coast line has been exposed to the dangers of increased unmonitored coastal traffic and the resultant effects.
The absence of credible interfaced technology to monitor, regulate and control the movement of vessels of all size has remained an area of concern for maritime security agencies, ports, Law Enforcement agencies and other stake holders.
Also, the much touted word Maritime Domain Awareness is here to stay but there is lot more that needs to be done to achieve even minimum levels of MDA which is critical to deterrent operations at sea.
Role of India
- The Indian Navy played a pivotal role in containing piracy on the high seas and is positioning itself as the “net security provider” in the broader Indian Ocean region with capacity building, joint exercises and increased multilateral exchanges.
- India has been reaching out to the smaller Indian Ocean island nations through various Maritime Domain Awareness (MDA) exercises.
- Domain Awareness (MDA) exercises includes :
- Search and Rescue (SAR) support.
- Oil pollution response exercises.
- Assistance in legal matters.
- Indian navy has supported countries in Indian Ocean region (IOR) such as Sri Lanka, Mauritius, Maldives and Seychelles with training, hydrographic surveys, surveillance operations and counter-terror patrols.
- India and China are locked in efforts to widen their respective spheres of influence in the strategically vital Indian Ocean.
- Given that the Indian Ocean channels carry two-thirds of the world’s oil shipments, a third of the bulk cargo and half of all container traffic, the region’s strategic significance is unquestionable. Also to counter china’s presence in Indian Ocean require strategic relation with our extended neighbourhood.
PRIME MINISTER VISIT OF INDIA OCEAN COUNTRIES
PM visited Indian Ocean counties to enhance economic and security cooperation. This highlights the renewed focus by India to take lead role in the region. China has in recent times made significant investment in infrastructure projects in these nations causing concern.
- India’s role as the “net security provider” in the Indian Ocean region received a major boost when Prime Minister Narendra Modi visited three India Ocean nations of Seychelles, Mauritius and Sri Lanka.
- India invited Seychelles and Mauritius to join the existing maritime security cooperation arrangement among India, the Maldives and Sri Lanka.
- India seeks a future for Indian Ocean that lives up to the name of ‘SAGAR – Security and Growth for All in the Region’.
- India is helping Indian Ocean littorals as part of capacity and capability enhancement in strengthening their maritime domain awareness capabilities.
- Mr. Modi said those who lived in the region had the primary responsibility for peace, stability and prosperity in the Indian Ocean.
- Mr. Modi said that our goal is to seek a climate of trust and transparency; respect for international maritime rules and norms by all countries; sensitivity to each other’s interests; peaceful resolution of maritime security issues; and increase in maritime cooperation.
India and Mauritius relations
India and Mauritius share unique bonds based on our shared cultural heritage and traditions. Indo-Mauritians form about 70% of the country’s population. Mauritius celebrates its National Day on March 12 as a mark of respect to Mahatma Gandhi, who began his Dandi march on this day in 1930.
- India has extended a $500-million Line of Credit for development or security projects that Mauritius will decide on.
- Mauritius has a vast 2.3 million sq km of Exclusive Economic Zone (EEZ).
- An India-built naval patrol vessel ‘Barracuda’ for Mauritius was commissioned by Prime Minister Narendra Modi who said it will make the Indian Ocean “more safer and secure.”
- Mauritius by virtue of its strategic location is recognised as a hub of maritime activities in Indian Ocean. The induction of coastal patrol vessel was yet another step for better control of its large assets besides helping in policing transnational crimes like piracy and bridging the communication gaps among its various islands.
India and Seychelles relations
- Prime Minister became the first Indian PM to visit Seychelles after 34 years. Seychelles is one of the largest recipients of Indian assistance in this area.
- The close relationship between the two countries is based on the twin planks of maritime security and development cooperation.
- India has been involved with Seychelles in helping bolster its need for maritime security as it has a large Exclusive Economic Zone (EEZ) of 1.3 million square kilometers.
- Development cooperation encompasses capacity building where more than one percent of the Seychelles’ population is trained under ITEC, provision of patrol vessels, hydrographic surveys etc besides cooperation in counter piracy and counter terrorism in high seas, which is critical for India’s extended maritime security as well.
- There is a tradition of bilateral development cooperation in health, science & technology, renewable energy, providing advisors in critical areas and in bilateral exercises.
- Seychelles is a part of the Pan African e-Network project between India and the African Union.
Why is Seychelles Important for India?
- India is trying to influence Indian Ocean Region by extending economic, military and diplomatic cooperation and through strategic partnership.
- From 2005, India has embarked upon a policy to engage four western Indian Ocean island nations and Seychelles forms a crucial part of it.
- Apart from its strategic location on international sea lanes of communication, Seychelles is a leader among SIDS group (Small Island Developing States) which has multifold areas of convergence with India.
- It is a leader in advancing the concept of ‘blue economy’, which covers huge panoply of aspects like environment, hydrocarbons, marine economy, renewable energy and exploration of continental shelf.
- India secured a pact to develop infrastructure of Assumption Island in Seychelles, which gives a strong boost to this partnership. Spread over 11 sq.kms, it is strategically located in the Indian Ocean, north of Madagascar
- Exercise Lamitye- 2016: The Seventh Joint Military Training Exercise between the Indian Army and the Seychelles People’s Defence Forces (SPDF) – LAMITYE 2016 was conducted at Seychelles Defence Academy (SDA), Victoria.
- Navy’s aircraft on mission in Seychelles: Indian navy has for the first time deployed maritime reconnaissance aircraft to Seychelles for surveillance of the island nation’s Exclusive Economic Zone.
China’s Indian Ocean strategy: Implications for India
The Chinese maneuvering in the Indian Ocean — part of China’s larger plan to project power in the Middle East, Africa and Europe — aims to challenge America’s sway and chip away at India’s natural-geographic advantage. Here is a look at china’s policy in the Indian Ocean and how does it have implication on Indian interests in the region?
The Indian Ocean is the world’s third largest body of water and has become a growing area of competition between China and India.
The two regional powers’ moves to exert influence in the ocean include deep-water port development in littoral states and military patrols. Though experts say the probability of military conflict between China and India remains low, escalated activities (such as port development and military exercises) and rhetoric could endanger stability in a critical region for global trade flows.
Importance of Indian Ocean
Indian Ocean Region is important for the various reasons. Following are few important reasons:
- Trade- Indian Ocean contains the trade route to Africa, Europe, West Asia, Central Asia, ASEAN and Australia.
- Energy Security- 70% of India’s oil import comes from West Asia. It is important trade route for energy access.
- More than half the world’s armed conflicts are presently located in the Indian Ocean region, while the waters are also home to continually evolving strategic developments including the competing rises of China and India, potential nuclear confrontation between India and Pakistan, the US interventions in Iraq and Afghanistan, Islamist terrorism, growing incidence of piracy in and around the Horn of Africa, and management of diminishing fishery resources.
- Poly metallic nodules at Ocean floor provide vital metals extraction sources from ocean.
Importance of Indian Ocean to India:
- 7,500km coastline linking India to Indian Ocean.
- 80% of India’s trade is through Sea route passes through Indian Ocean.
- 85% of oil and gas imported comes through Indian Ocean into the country.
- Fishing and tourism depends on it due to huge marine re-courses it spreads prosperity in coastal plains of India.
- Vital for managing better relation with neighbours like Vietnam, , Malaysia, Singapore, Thailand, Sri-Lanka, Maldives, Seychelles, Mauritius, Iran, etc.
China’s policy in Indian Ocean
China’s one belt one road project, port city development in Sri lanka, frequent visiting of China’s marine ship in Indian ocean is a big worry for India.
1.One belt one road initiative
- The One Belt One Road initiative is the centre piece of China’s foreign policy and domestic economic strategy. It aims to rejuvenate ancient trade routes–Silk Routes–which will open up markets within and beyond the region.
- Through this initiative, China’s plan is to construct roads, railways, ports, and other infrastructure across Asia and beyond to bind its economy more tightly to the rest of the world.
2.String of pearl theory
- It refers to the network of Chinese military and commercial facilities and relationships along its sea lines of communication, which extend from the Chinese mainland to Port Sudan.
- The sea lines run through several major maritime choke points such as the Strait of Mandeb, the Strait of Malacca, the Strait of Hormuz, and the Lombok Strait as well as other strategic maritime centers in Pakistan, Sri Lanka, Bangladesh, the Maldives, and Somalia.
3. Getting closer to Pakistan
- In China’s ambitions to convert the Indian Ocean into a ‘Chinese Ocean‘, the lead major accomplice role has been assigned by China to Pakistan.
- China has assigned two major roles to Pakistan in this direction. The first focuses on Pakistan facilitating the Chinese development of the strategically located Gwadar Port on Baluchistan’s Makran Coast in close vicinity of the Hormuz Straits as a virtually exclusive Chinese Navy facility, though currently touted as a commercial venture.
- China’s second role being assigned to Pakistan is to keep Indian Navy’s Western Fleet from exercising sea-control of the Arabian Sea by building-up Pakistan Navy’s submarine fleet as a focussed Chinese attention.
4. China getting closer to Sri Lanka
- After a PLA-Navy submarine docked twice in Colombo, Sri Lanka last year, there is anxiety among Indian analysts of a renewed thrust by China for a permanent military presence in the Indian Ocean.
What does China’s rise mean for India?
- Security dilemmas between China and Japan; China and India; China and Vietnam; and others will intensify due to China’s presence. In other words, the environment in which India pursues its interests will get more complex.
- There are troubling questions about the motive behind China’s actions and other maritime infrastructure projects in the Indo-Pacific region.
- China’s pitch for benign security in the Indian Ocean appears to be an attempt to convince Indian Ocean states of the need for Chinese support and security arrangements.
- There are concerns being raised about China’s intention of making maritime power central to achieving Chinese dominance in Asia.
How can Indian secure itself in the region?
- Participate in all regional connectivity – Outside OBOR, India must participate in all regional connectivity like INSTC, Ashgabat agreement etc
- Harness Cultural links –We have rich cultural linkages with west and Central Asia countries. We must use it to establish relation economic, political and military relations. Through this our “Project Mausam” will also get a boost.
- Soft Power –We have reputation of sharing developmental benefits, unlike China. This image should be harnessed to win more and more projects in Africa, Maldives, Sri Lanka and other littoral countries.
- Naval Exercises – Joint exercises in Indian Ocean with other powers like U.S, Japan and Australia should be done to prevent hegemony of any one nation.
- Military capability –Research ties with U.S, Russia and Israel should be beefed up and procurement with technology transfer have to be adopted.
- Regional Growth: prosperity & security in the IO region should be increased through MAUSAM, SAGAR.
- Blue Economy: development of Blue Economy should be extended to Mauritius, Sri Lanka, Maldives.
- Revive Indian ocean rim association
- As far as interests of India in Indian Ocean are concerned, it is important for India from multiple point of view. Strategically, trade, security etc.
- In the recent years, India has signed several bilateral agreements with countries i.e. Maldives, Seychelles, Sri Lanka, in order to secure its interests in the region.
- Though India may not have huge reserve as China and cannot do the scale of investment as it China does. But trust, good image, relations and soft power that India has developed will go a long way in countering possible threat by China.