Australia and India

Bernie Lai, Foreign Affairs, Defence and Security

Key issue

Australia and India have developed closer strategic and economic ties in recent years. This closer partnership is anticipated to continue to flourish due to both countries’ shared strategic interests in the Indo-Pacific region. However, India’s ongoing human rights issues may present obstacles to Australia’s continued pursuit of mutual strategic and economic interests.

Australia has recently elevated its bilateral relationship with India to a Comprehensive Strategic Partnership (CSP), which has laid the foundations for the Australia-India Economic Cooperation and Trade Agreement (AI ECTA), deeper engagement through the Quadrilateral Security Dialogue (Quad) and increased defence cooperation, among other things. The strengthening of ties between both countries will likely continue to gain momentum, given their converging strategic interests in the Indo-Pacific region characterised by China’s growing assertiveness.

Comprehensive Strategic Partnership

In June 2020, Australia’s Prime Minister Scott Morrison and India’s Prime Minister Narendra Modi affirmed their commitment to strengthening Australia-India ties for the long term and committed to elevating the bilateral Strategic Partnership concluded in 2009 to a CSP. Under the CSP, both countries decided to work together in 11 areas of cooperation:

enhancing science, technology and research collaboration
maritime cooperation for an open and inclusive Indo-Pacific
defence cooperation
regional and multilateral cooperation
countering terrorism
economic cooperation
innovation and entrepreneurship
agriculture cooperation and water resources management
education, culture, tourism and people-to-people ties
support in UN and international bodies
public administration and governance.

With these initiatives and the high-level dialogues facilitating them, the CSP has been seen as a vehicle that allows Australia to develop a bilateral relationship with India ‘in a formal and regularised setting that falls short of an alliance’. Equally, India has used comprehensive strategic partnerships ‘as part of a concerted strategy to broaden and enmesh networks of political and defence cooperation, often aimed at keeping external nations involved in the [Indo-Pacific] region’, according to Henry Storey (The Interpreter).

Australia-India Economic Cooperation and Trade Agreement

A 2018 independent report to the Australian Government as a roadmap to deepen economic integration with India, An India economic strategy to 2035, argues that ‘no country would offer more growth opportunities for Australian businesses than India over the coming decades’ (p. 6). In April 2022, Australia and India signed the interim AI ECTA but fell short of concluding a Comprehensive Economic Cooperation Agreement (CECA) after 9 rounds of negotiations since 2011. Nevertheless, the AI ECTA is the first step towards a full CECA, with both countries having committed to concluding negotiations on a CECA by the end of 2022.

The AI ECTA is reportedly expected to almost double annual bilateral trade from US$27.5 billion in 2021 to US$45 billion in the next 5 years. The trade deal will eliminate tariffs on over 85% of Australian exports to India, rising to almost 91% over a decade, while 96% of Indian imports entering Australia will become duty-free. However, India’s continued trade protectionism amid domestic political pressures has meant that various agricultural and dairy products, such as wheat, rice, chickpeas and beef, are excluded from tariff reduction or elimination in the AI ECTA. It is likely that Australia will face challenges in persuading India to ease trade barriers in these areas in future CECA negotiations, as agriculture coupled with its allied sectors is the largest source of livelihoods in India.

According to the Department of Foreign Affairs and Trade (DFAT) (pp. 4–5), the AI ECTA is intended to address Australia’s need for trade diversification due to the risks of market concentration highlighted by the COVID-19 pandemic, US- China trade tensions and Australia’s recent bilateral trade challenges. In April 2022 while still in opposition, the now Prime Minister Albanese identified ‘the difficult situation with our exports to China’ as a reason for Australia’s ‘need to get more serious about trade diversification’. There also appear to be similar concerns on India’s part, with one commentator suggesting that the AI ECTA was partly enabled by India’s ‘China-exclusive’ approach to securing trade agreements. Also of relevance is that the Supply Chain Resilience Initiative launched by Australia, India and Japan in April 2021 reportedly aims to reduce supply chain dependencies on China and has been seen as conducive for the AI ECTA.

Further, DFAT has stated (p. 13) that the AI ECTA will contribute to strengthening the CSP and will support Australia in its implementation of the March 2022 India economic strategy update, which the Morrison Government agreed to in its August 2021 response to the recommendations of the Joint Standing Committee on Trade and Investment Growth’s report, Pivot: diversifying Australia’s trade and investment profile.

On 16 June 2022, the Minister for Trade and Tourism, Don Farrell, confirmed to his Indian counterpart, Piyush Goyal, ‘the Australian Government’s intention to work efficiently though Australia’s parliamentary processes to ratify the [AI-ECTA] quickly, so we can deliver immediate trade benefits for our countries’. They also ‘committed to [moving] rapidly to commence negotiations on the full CECA and capitalise on the enormous potential for closer economic ties between Australia and India’.

Quadrilateral Security Dialogue

The Quad, comprising Australia, India, Japan and the US, is one of the most notable multilateral forums through which Australia and India have strengthened their bilateral relationship. It is increasingly seen as a counterweight to China’s regional ambitions in the Indo-Pacific, although India’s External Affairs Minister Subrahmanyam Jaishankar has reportedly said ‘The Quad is about the world, and I would not like to see it reduced to China’. See the article on 'Australia's security relationships' elsewhere in this Briefing book for further detail.

In May 2022, Prime Minister Anthony Albanese and Foreign Minister Penny Wong attended the fourth Quad Leaders’ Summit in Tokyo. Ahead of his visit to Japan, India’s Prime Minister Modi indicated that he looked forward to discussing bilaterally with Prime Minister Albanese ‘the multifaceted cooperation between India and Australia under the Comprehensive Strategic Partnership, and regional and global issues of mutual interest’.

While in Tokyo, the Quad members also discussed their respective response to the Russia- Ukraine conflict and its associated humanitarian crisis. As Russia has long been an arms supplier to India, India has not publicly condemned Russia and has abstained from several key United Nations votes over its invasion. While some commentary has suggested that India’s nonalignment stance may complicate the Australia- India relationship, Indian officials have noted that Australia and other Quad members have expressed understanding or appreciation of India’s position on the Ukraine issue. In March 2022, a US official reportedly claimed that India had cancelled military purchases from Russia in response to the Ukraine situation, although there are also reports that no formal decision has been made on such cancellation.

There have also been mixed views about the impact of AUKUS, the Australia- UK- US security pact, on the Quad’s value for India. Some have suggested that AUKUS might weaken the Quad’s strategic cooperation in the Indo-Pacific and its capability to act as a counterweight to China’s ambitions in the region, with the Quad being reduced to dealing with issues such as climate change and the COVID-19 pandemic. However, it has been pointed out that the Quad ‘is not an Asian North Atlantic Treaty Organization (NATO)’ or a miliary arrangement. Instead, it is a network of 4 democracies with a shared vision for a free and open Indo-Pacific.

Others have posited that the creation of AUKUS serves India’s interests in a stable balance of power in the Indo-Pacific by allowing the Quad to maintain its broad non-military agenda and thus allowing India to maintain its strategic autonomy- without directly involving India in an alliance that has been seen as explicitly anti-China. As Manjari Chatterjee Miller (Council on Foreign Relations) puts it, ‘the Quad keeps the door open for India for close defense cooperation without resorting to a security alliance’. In any case, India’s Foreign Secretary, Harsh Vardhan Shringla, has reportedly said that AUKUS ‘has neither relevance to Quad, nor will it have any impact on its functioning’.

Defence relations

In recent years, Australia and India have increased their defence cooperation, which is now a key pillar of the India- Australia partnership that encompasses almost every major function of the military. However, an Indian Navy veteran has suggested that the disparity between the technological capabilities of India and Australia, as well as the platforms each operate, needs to be gradually bridged for bilateral cooperation to become more effective.

During the March 2022 India- Australia Virtual Summit, prime ministers Modi and Morrison reaffirmed their commitment to their CSP, and on defence cooperation they:

agreed to deepen cooperation to address security and defence threats and challenges
welcomed the establishment of the General Rawat India- Australia Young Defence Officer Exchange Program
welcomed enhanced maritime information-sharing and maritime domain awareness
affirmed their commitment to build upon defence information-sharing arrangements to coordinate more closely across the Indo-Pacific
looked forward to India’s participation in Australia’s Indo-Pacific Endeavour exercise in 2022
underscored the importance of reciprocal access arrangements in facilitating deeper operational defence cooperation and its contribution towards free and open critical regional maritime corridors
reaffirmed following up on opportunities for further defence cooperation in areas of mutual interest.

As part of the CSP, in June 2020 the Secretaries 2+2 dialogue for defence and foreign affairs was upgraded to the 2+2 Ministerial Dialogue, which was first held in September 2021 and is scheduled to resume in 2023. Both countries also established the Mutual Logistics Support Arrangement (MLSA) and the Defence Science and Technology Implementing Arrangement (DSTIA). The MLSA aims to enhance military interoperability, enable increasingly complex military engagement and increase combined responsiveness to regional humanitarian disasters. The DSTIA aims to facilitate improved collaboration between both countries’ defence research organisations.

Troy Lee-Brown (The Strategist) points out that ‘the vulnerabilities of some Russian military equipment that are now being exposed by Ukrainian and Western countermeasures’ will be a reality check for India’s longstanding overreliance on Russian arm supplies. He then posits that the Russia- Ukraine conflict provides opportunities for Australia and India to enhance their defence relationship by advancing their level of cooperation in both the MLSA and the DSTIA. Australia and India could also pursue a security communications agreement similar to what the US and India have had in place since the US designated India as a ‘Major Defense Partner’ in 2016.

Meanwhile, predicting a Labor Government in Australia will ‘likely be keen to broaden AUKUS to dampen perceptions that it’s an Anglo-Saxon club’, David Brewster (The Interpreter) has suggested that there is considerable potential for involving India in the high-end defence technology aspect of AUKUS in areas such as artificial intelligence, and quantum and undersea technologies. Nevertheless, Dr Brewster cautioned in 2017 that differences in Australia’s and India’s history, strategic perspectives, size, wealth and culture could create many challenges for their relationship, and that Australia needed to ‘decisively move beyond the box and think more innovatively about its engagement with India’. He also noted that despite both countries’ growing strategic convergences, practical defence and security cooperation is very thin in comparison with Australia’s other partners.

India’s human rights issues

In May 2022 in Tokyo, the 4 Quad member leaders, including Prime Minister Modi, stated ‘We strongly support the principles of freedom, rule of law, democratic values … peaceful settlement of disputes without resorting to threat or use of force … We will continue to act decisively together to advance these principles in the region and beyond’. However, some have suggested that any expectations on India to be a robust advocate for democracy and democratic ideals through the Quad may not sit well with India, which is considered by some to have become an ‘illiberal majoritarian democracy’ under the Modi Government.

In recent years, various human rights concerns in India have been raised by international governments, human rights organisations and the media. These have included the revocation of the constitutional status of the Muslim-majority region of Jammu and Kashmir in 2019; persecution of religious minorities, including Muslims, by Hindu nationalists (and the Modi Government’s failure to crackdown on such persecution); the passage of the Citizenship (Amendment) Act 2019 that enshrines a pathway to citizenship for immigrants specifically excluding Muslims, and violence against the Dalit community. The US Commission on International Religious Freedom has recommended that the US Government designate India as a ‘country of particular concern’ for ‘engaging in and tolerating systematic, ongoing, and egregious violations of religious freedom’ and has said that the Modi Government ‘used its strengthened parliamentary majority to institute national level policies violating religious freedom across India, especially for Muslims’. There have also been concerns about the Modi Government’s crackdown on a range of civil and political rights, as reported by Human Rights Watch, Amnesty International and the US Department of State.

Ahead of Prime Minister Modi’s visit to Germany in early May 2022, Human Rights Watch suggested that European governments should reconsider Europe’s ‘quiet diplomacy’ approach to the human rights situation in India, which had ‘led to growing sentiment that Europe is willing to overlook the plight of affected communities in India because it needs India as an ally against China and Russia’. Similarly, as a country with a track record of condemning and responding to other countries’ human rights abuses, Australia may be urged by human rights groups to consider the implications of India’s ongoing human rights issues in its continued pursuit of strategic and economic ties with India.

Hugh Piper (The Diplomat) argues that any silence by Australia on India’s human rights issues:

… undermines Australia’s prosecution of human rights issues with China and its broader strategy of handling a difficult relationship with Beijing. While Canberra is right to call out repression in Xinjiang and Hong Kong, among other issues, its failure to comment about India plays into Beijing’s hands, suggesting that Australia’s advocacy is strategic rather than genuine concern.

In terms of Australia and India ties, however, silence on human rights in this growth phase of the relationship could undermine its long-term success. By avoiding the topic now, Australia sets a difficult precedent, making it harder to speak and act in the future without causing major, even irreparable, damage to the bilateral relationship. The longer human rights issues persist in India, the harder it will be for Australia not to voice its concerns – and Canberra may well find itself isolated for not doing so. Moreover, an India beset by internal divisions and growing marginalization of democracy makes for a less reliable partner …

However, the implications of India’s human rights issues could amount to more than just those concerning its reliability as a rising strategic and trade partner of Australia. Any ethno-religious conflicts arising from the disintegration of religious minorities in India, which include about 200 million Muslims, could lead to political instability and significant disruption of India’s social fabric. Should there be any consequential outbreaks of communal violence and religiously motivated attacks resulting in the collapse of India as a key member of the Quad, it could then ‘degrade Australia’s strategic environment across the vast Indo-Pacific’, according to Ramesh Thakur, a former UN Assistant Secretary-General.

There are also domestic national security reasons, mostly in social cohesion terms, for Australia to respond meaningfully to India’s human rights issues. Noting the recent controversy over statements made by a Hindu-nationalist politician from the Bharatiya Janata Party (which has been India’s ruling political party since 2014) during his visit to Australia, there is the potential for the ethno-religious conflicts in India to metamorphose into inter-diasporic conflicts in Australia. Further, Deepak Joshi (NRI Affairs) has suggested that Australia’s social cohesion is threatened by Hindu extremism and claimed that there is ‘infiltration of Hindu extremist groups in Australian education, multicultural media and politics’.

As the Australian Greens’ former foreign affairs spokesperson, Janet Rice, has proposed, the Australian Government could consider the inclusion of binding human rights protection clauses or binding clauses that commit to upholding democracy in any free trade agreements with India (for example, the to-be-negotiated CECA). However, any proposed clauses of that nature would likely serve as safeguards against future human rights violations, rather than as responses to pre-existing problems. Most recently in 2019, the Morrison Government rejected the Greens’ recommendation that human rights protection clauses be included in Australia’s free trade agreements with Indonesia and Hong Kong (p. 6).

Following the enactment of the Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021, the Australian Government now has the power to impose sanctions to address particular issues or conduct (known as thematic sanctions), which include serious violations or abuses of human rights and activities that undermine good governance or the rule of law. While previously sanctions imposed by Australia have been country-focused, these reforms now allow the Government to impose sanctions to address a wider range of conduct (for example, human rights abuses), irrespective of where the conduct occurs.

Back to Parliamentary Library Briefing Book

For copyright reasons some linked items are only available to members of Parliament.

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.