Timing has always been a challenge in Australia’s relationship with India.
In the past substance often lagged enthusiasm. Today the risk is that we are not moving fast enough and Australia might fall behind as other countries accord India a higher priority. This is already happening in some areas.
Momentum is important to relationships. We cannot afford to lose momentum or to assume that the logic of complementary interests will be enough to take the economic relationship to the level it needs to rise.
To counter this, Australia needs an ambitious India strategy. This report recommends that we should strive by 2035 to lift India into our top three export markets, to make India the third largest destination in Asia for Australian outward investment, and to bring India into the inner circle of Australia’s strategic partnerships, and with people to people ties as close as any in Asia.
Australia has long seen India as an important country in its own right and one with which Australia should have a relationship of substance anchored in shared interests and shared values. But finding that alignment has proven difficult over time.
Australia has never been in the firstrank of India’s international priorities. India’s focus has understandably been on its neighbourhood and after that on the major powers.
Outside of areas such as resources, education, mining and, in a different sense, sport India does not naturally look to Australia as a first order partner. That perception needs to change if the relationship is to find the traction to take it to the next level.
From when it first became independent in 1947 until relatively recently, India and Australia also saw the world very differently. Our hard interests, strategic and economic, rarely intersected.
India’s economy went down the path of self-sufficiency, not global trade. During the Cold War we inhabited different strategic universes. Our communities had little to do with each other.
Today however we are as close as we have ever been to getting the timing right and finding the content to underpin the relationship
Central to this report are judgements about why India matters to Australia. India is the fastest growing large economy in the world. It will have the world’s largest population well before 2035. Beyond scale and complementary economies, India also offers us an opportunity to spread our trade and investment risk in Asia.
In the Overview chapterI have summarised the core of the strategy the report recommends (‘sectors and states’), how things in India are changing for the better, the challenges that remain and the importance of locating our economic strategy within a broader relationship with India, of which a growing geopolitical congruence and people to people ties are the other two pillars.
The report contains detailed chapters on each of the 10 sectors identified as areas where Australia has a measure of competitive advantage.
The chapter on Indian states is designed to answer the question: where should Australia focus and where do you start in a market as large and diverse as India?
Throughout the report I have sought to provide a balanced perspective of both the challenges and opportunities in the Indian marketplace. The scale of India and the rhetorical flair of its leaders can at times gloss over the challenges on the ground or the way in which India can test the patience of even the most committed. I have sought to put the challenges in perspective and to acknowledge the significant changes and reforms which are taking place, concluding that the balance sheet overwhelmingly favours opportunities over constraints.
Indian policy makers know what needs to be done. They do not need tutorials on the policy options. But they also know that managing a country as big and diverse as India with a robust democracy and a vocal media will inevitably mean compromises, delays and less than ideal policy approaches. In this India is not unique.