Chapter 2 Australia – India Intergovernmental Relations
Current intergovernmental exchange
2.1
The current state of the Australia-India relationship has been usefully and
succinctly summarised in a submission to the Committee’s inquiry from DFAT as
‘never in better shape.’ More precisely this assessment is in terms of;
The standards generally used to measure bilateral relations
(high-level political visits, trade and investment flows and interaction
between communities and business).[1]
2.2
The impetus for this improved state of bilateral relations has been
changes in the global strategic outlook brought about by the end of the Cold War.
These days, Indian foreign policy is ‘based increasingly on careful national
interest calculations rather than ideology—as had been substantially the case
earlier.’ With India aspiring to become:
An integral member of the foreign and security policy
institutions that shape the regional and global order, including the UN
Security Council and the G8. It is also a member of the East Asia Summit and
the ASEAN Regional Forum.[2]
2.3
In its 2008 Submission DFAT also noted that:
Australia supports India’s permanent membership of the UNSC
and its inclusion in APEC when the membership moratorium ends.[3]
2.4
As part of this wider policy of strategic engagement, India has sought increasingly co-operative relations with the United States and under its ‘Look
East’ policy has also made engagement with the countries of North and South East Asia (encompassing Australia and New Zealand) a priority.
2.5
At the economic level, India has been active in negotiating regional
trade agreements with ASEAN countries as well as with ASEAN as a whole. Free
Trade Framework Agreements are in place between India and Singapore, Thailand
and ASEAN itself and Joint Study Groups have been set up to facilitate further
agreements between India and both Malaysia and Indonesia.[4]
The 2008 Submission also notes that ‘negotiations on a Japan-India FTA are well
advanced’.[5]
2.6
As noted elsewhere in this Report, underscoring these active bilateral
and multilateral engagements is the perception that India’s demographic weight
and high economic growth rates are likely to be sustained.
2.7
In recognition of the shared democratic values of Australia and India
and in answer to a question from the Committee about general government to
government exchanges ‘at the political level’, in the form of a ‘political
exchange program’, the Australia-India Council noted that:
The Australian Political Exchange Council, which is part of
the Department of Finance and Administration, has an agreement with the Indian
Government, which is being worked through at the moment, to facilitate
exchange.[6]
Governmental exchanges at the ministerial level
2.8
The visit to India of then Prime Minister the Hon John Howard, MP on 5-8
March 2006 served as the occasion for concluding a series of high level
agreements. During his visit the Prime Minister witnessed the signing of a
Trade and Economic Framework, a Civil Aviation Agreement and Memoranda of
Understanding (MOU) on Defence Cooperation, Customs and Biotechnology. [7]
In association with the visit Austrade organised a 20 person high level
business delegation to accompany the Prime Minister to New Delhi, Mumbai and
Chennai. Austrade organised itineraries for the business delegates and the
program included meetings with Indian ministers and business leaders:
During the visit four companies announced new offices in India (Leightons, Linfox, Macquarie Equities, Hydro Tasmania) and one company (Santos) announced a major commercial collaboration with an Indian company Reliance
Industries for resource exploitation. [8]
2.9
In addition to visits undertaken during the former government, the
current Australian Government has been committed to engaging with India on a ‘strategic long term basis’.[9]
Visits to India by the Minister for Trade (Mr Crean) in January 2008 and the Minister for Foreign Affairs (Mr Smith) in September 2008
underlined the Government’s firm commitment to substantially increase
collaboration in a wide range of areas. During Mr Smith’s visit, India agreed to take the level of relations to a strategic partnership and work towards
this objective. This is a term that India uses to characterise its most
important bilateral partnerships, including with the United States, the
European Union, China and Japan.[10]
2.10
Concurrently, there have been increasing numbers of ministerial meetings
at both the federal and state levels. In addition to meetings involving the
Minister for Foreign Affairs, the DFAT submission notes ministerial level
visits from Ministers for Immigration and Multicultural Affairs,
Communications, Information Technology and the Arts, Tourism and Small Business
and Agriculture, Fisheries and Forestry. Ministerial level visits are
underlined by official level exchanges in the form of:
Joint working groups which provide strategic direction in
areas such as energy and resources, tourism, education, science and technology
and ICT.[11]
2.11
In its 2008 Submission, DFAT detailed the following Ministerial level
contacts:
Seven Indian Ministers visited Australia in the first half of
2008 (the ministers for trade and commerce, science and technology, civil
aviation, steel, food processing, youth affairs and sport, and external
affairs) highlighting the breadth and depth of existing and potential economic
links.
Major high-level meetings in 2008 have included the Joint
Ministerial Commission, co-chaired by Mr Crean and India’s Minister for
Commerce and Industry, Kamal Nath, in May and the Foreign Ministers’ Framework
Dialogue, which Mr Smith cochaired with Indian Minister of External Affairs, Pranab Mukherjee, in Canberra in June. The Joint Ministerial Commission covered the WTO Doha Round, as well as key regional and bilateral trade issues. Mr Crean and Mr Nath witnessed the signing of a Memorandum of Understanding (MoU) on intellectual property
cooperation and welcomed new bilateral dialogues and exchanges on economic
policy and competition policy. They also agreed to establish a bilateral CEO
Forum.[12]
2.12
Initiatives agreed at the June 2008 Foreign Ministers’ Framework
Dialogue included commitments to facilitate public sector linkages between
Australia and India including a bilateral water dialogue, the set up of a
working group on Visa, Consular and Passport matters and the signing of two
treaties on extradition and co-operation in criminal law matters.[13]
2.13
In answer to a question from the Committee about where, in his opinion, government
to government links could be most usefully focussed, Mr Cameron Clyne of the
National Australia Bank noted that for his business to participate in rural
sector finance in India where there was an obvious market, ‘government to
government engagement’ was required to open up the sector to foreign
investment.[14]
2.14
With respect to trade matters, DFAT reports that Australia-India trade
has experienced a renaissance in recent times:
Two-way trade in goods and services has grown at a breakneck
average annual rate of 28.1 per cent over the five years to 2007. India was
Australia’s 10th largest trading partner in 2007, with two-way trade
at $13.3 billion.[15]
2.15
The Commonwealth Department of Education, Science and Training submission
refers to ministerial initiatives involved in opening up opportunities for the
Australian higher education sector in India’s developing market for tertiary
education services and research links:
Over recent years, increasing numbers of educational
institutions have been visiting India to develop relationships with counterpart
institutions. Further, visits by State government delegations and Ministers
have also increased. [16]
2.16
Government to government relations in the education sector are
underpinned by three MOUs. The first memorandum on education and training cooperation,
entitled the Education Exchange Programme Agreement, was signed by the then
Minister for Education Science and Training, the Hon Dr Nelson MP, in October
2003 and covers areas such as staff and student exchange, joint seminars and
conferences. Another memorandum signed at the same time covers science and
technology cooperation. A further such agreement on biotechnology cooperation
was signed during the then Prime Minister’s visit to India in March 2006.[17]
State and official level exchanges
2.17
Governmental links between Australia and India at the Prime Ministerial
and Ministerial levels have been complemented by a variety of links at the
State and official levels. The DFAT submission mentioned several state level
visits to India including visits from the Premiers of Western Australia and South Australia. The Queensland Government submission noted that the then Premier Beattie
was the first Queensland Premier to make an official visit to India when he
visited Mumbai and Bangalore in February 2003 and again in September 2004.[18]
2.18
At the hearing on 3 November 2006, DFAT officials told the Committee
that:
The architecture of the political relationship is well
developed. We have more or less annual foreign ministers framework dialogue
meetings and we have meetings between the trade ministers in the context of the
joint ministerial commission, also meant to be held on a regular basis. We also
have annual senior officials talks and strategic dialogue.[19]
2.19
The supplementary submission received from DFAT in 2008 outlined the
following State and official visits:
There have been a number of senior-level visits at a State
level in 2008, including visits to India by the Premier of South Australia and
the Deputy Premier of Western Australia. It will be important to maintain a
steady rhythm of visits and other exchanges throughout the rest of 2008 and
beyond.
At the officials’ level, bilateral relations are underpinned
by regular Senior Officials’ Talks and a Strategic Dialogue (last held in Canberra in February 2008). Senior officials from DFAT, Treasury, AQIS, Department of
Resources, Energy and Tourism, AusAID and CSIRO have visited India in 2008, as have a range of seniorlevel defence personnel. In addition, a series of
bilateral joint working groups promote progress in key economic sectors, for
instance minerals and energy, education and science. [20]
2.20
The submission from the Government of Western Australia detailed several
ministerial level exchanges between that State and the Government of India.
Ministerial level meetings focussed on energy resources, the mining industry
sector and trade and commerce generally.[21] The then West Australian
Premier, Mr Geoff Gallop, was the first to make an official visit to India in October 2005.
2.21
The Department of Agriculture and Food of Western Australia, in a submission
to the Committee, noted as a general observation that both State and Federal
governments can derive benefits from direct linkages between Australian and
Indian governmental agencies, particularly those concerned with Indian
agricultural reform:
Particularly as this could translate among other trade
benefits, into reciprocity by India in reducing tariff and non-tariff trade
barriers for Australian agribusiness exports to India.[22]
The Western Australian government
has engaged in a number of such initiatives including training and research
programs.[23]
2.22
The WA Government, through the Department of Industry and Resources, has
operated a Western Australian Trade Office in Mumbai since 1996, with a
satellite office in Chennai and was the first state to open a trade office in India. This initiative has been complimented by a large number of official visits. The WA
Government’s submission to the Committee noted that the state links were to
encourage the diversification of its exports to India (95 per cent of which
consist of non-monetary gold), and to seek out specific market opportunities. [24]
2.23
In addition to DFAT, a number of other Australian Government agencies
contribute to promoting Australia’s trading opportunities with India. These include the Department of Industry, Tourism and Resources, Tourism Australia,
Department of Education Science and Training (DEST), Department of Immigration
and Citizenship, Departments of Defence (DoD), Communications, Information
Technology and the Arts, and the Department of Agriculture, Fisheries and
Forestry. [25]
2.24
The first Australia-India Joint Working Group on Education and Training
Cooperation under the terms of the MOU (see paragraph 2.11 above) was held in
Canberra on 24 May 2005 where further areas for potential cooperation were
identified and agreed including collaborative research in educational policy,
research student exchange, institutional cooperation and capacity building in
vocational and technical education, distance education as well as the
recognition of qualifications. [26]
2.25
The DEST Submission noted that, in general:
Australia and India have a positive and cooperative bilateral
education relationship, facilitated by strong government to government links
and institutional cooperation.[27]
2.26
The submission from the Government of Queensland noted a number of Australia/India
government to government links. A total of seven trade delegations had been
sent to India sponsored by the Queensland Government during 2004 and 2005. Also,
members of a higher education delegation led by the Queensland Education Minister
attended a medical research and biotechnology conference in India in March 2006. A Queensland Government Trade and Investment Office opened in Bangalore in 2003 with another office to be opened in 2007.[28]
Sector specific bi-lateral relations
Defence
2.27
The current defence relationship between Australia and India is focussed on strategic dialogue, senior level visits and staff college exchanges.
It is possible that the relationship may extend to some limited practical
service to service activities. Possible areas of mutual strategic interest
include maritime security, counter-terrorism and peacekeeping.
2.28
Defence officials noted India’s strategic preoccupations in the
following terms:
As India’s economic and military influence increases, its
capacity to shape and contribute to our national influence grows…we aim to
encourage India to contribute more and, in some instances, to work together
with us in areas of mutual interest such as maritime security,
counter-terrorism and peacekeeping in various parts of the world.[29]
2.29
Under the terms of the MOU signed by the then Prime Minister Howard in
March 2006, the DoD is working on some information sharing initiatives
including oversight of the strategically crucial areas of the Malacca and
Sundra straits and the Sulu and Celebes seas in our immediate region.
2.30
The DFAT Supplementary Submission also noted ongoing co-operation in defence
and counter-terrorism matters:
In recognition of our common interests, Australia and India signed a defence cooperation MoU in 2007. At the June 2008 Foreign
Ministers’ Framework Dialogue, Mr Smith and Mr Mukherjee welcomed the decision
to establish regular chief of defence force level talks. Ongoing defence
engagement with India includes senior level visits, joint working groups, and
education and training exchanges. Australia is also pursuing increased defence
cooperation in the areas of counter-insurgency, peace-keeping, maritime
security and counter-terrorism.[30]
2.31
Other areas of mutual interest include participation in multilateral
naval exercises and counter-terrorism and high-altitude warfare training for
Australian and Indian Special Forces. Furthermore, it is expected that mutual
exchange visits involving Indian and Australian service chiefs will lead to the
inauguration of some lower level joint training exercises.[31]
2.32
In terms of Indian strategic planning, the DoD submission notes that India seeks an increased level of regional control within the Indian Ocean. In pursuit of
this goal India plans to acquire submarines, aircraft carriers and maritime
surveillance aircraft over the next 20 years in order to project and sustain
forces further afield. In answer to a question from the Committee about India’s
previously perceived defensively focussed ‘continental strategy’, Defence noted
that India’s statements of strategic intent currently recognised a more global
outlook and a need to develop modern capabilities in order to protect their
interests further afield. [32]
2.33
The DoD submission also notes that Indian defence officials are, like
their Australian counterparts, moving toward a network centric war fighting
approach ‘that plans to have the Services and their assets linked through a new
command, control, communications and computer infrastructure.’[33]
2.34
The Western Australian Government’s submission details the significant
defence assets based in the state and notes:
WA is also home to half of the Royal Australian Navy’s
surface combatant ships and all of the Collins class submarines. With the
facilities in place to support this large naval presence and WA’s proximity to India, there is an opportunity to invite Indian naval vessels to WA to conduct joint and
combined exercises with the RAN.[34] Annex D of the DoD submission details three
ship visits to the port of Fremantle by Indian naval vessels between 2001 and
2006 and there are indications that this could increase in the future.
The Aid Relationship
2.35
Australia has provided a total of around $500 million in development
assistance to India since the 1950s. Since the 1980s however, the level of
assistance has been relatively small and targeted to the areas of public
health, HIV-AIDS education, water and sanitation. In 2003, India moved to bring bilateral donor relationships to a close and to receive specific aid
through multilateral organisations. As a result AusAID has moved to deliver aid
to the countries of South Asia predominately through multilateral organisations
such as the UN, UNICEF, the World Bank and the Asian Development Bank.
Currently official development assistance to India is about A$10 million
delivered through these channels. [35]
2.36
India itself has moved to the position of aid donor in its region, (for
example India provided US$210 million during 2005-6 to Nepal, Afghanistan,
Bhutan, Bangladesh, some African countries and Vietnam) and has declined assistance
for the 2004 Tsunami. However, there are pockets of extreme poverty and deprivation
in India as well as the on-going AIDS epidemic for which Australia has targeted assistance programs to be delivered through multilateral and non-
governmental agencies. AusAID told the Committee:
India is estimated to have the largest number of people
living with HIV-AIDS, overtaking South Africa this year. If the pandemic is not
controlled, it would be reasonably expected to have serious negative effects on
the economic growth of the country, beyond the effects on the infected
individuals.[36]
2.37
Australia’s participation in the fight against HIV-AIDS in the South
Asia region is centred on a partnership with UNAIDS with Australia providing AUD$10
million towards a comprehensive response to the AIDS epidemic in four
north-east Indian states: Manipur, Mizoram, Nagaland and Meghalaya which are
located on the border of the “Golden Triangle” opium producing region and
vulnerable to infiltration by the drug trade.[37] More specifically, AusAID
told the Committee:
In terms of regional HIV-AIDS, our key activity has been
through the UN Office on Drugs and Crime, which has targeted intravenous drug
users around the region…We are about to move into phase 2 through UNAIDS. It is
going to be a $7 million activity over five years. [38]
2.38
In answer to a question from the Committee about Australian assistance
in the field of agriculture, in particular noting Australia’s expertise with
respect to drylands agriculture, AusAID said that such programs were
administered by the Australian Centre for International Agricultural Research (ACIAR).
2.39
ACIAR were currently administering projects of a total cost of A$13.6
million over several years in the areas of food safety and exports, irrigation
improvement, trade liberalisation and market reform, increasing cattle and
sheep productivity and salinity reduction. [39]
2.40
AusAID also noted that Australia provides a source of microfinance to
recipients in Bangladesh in partnership with a locally based NGO there and that
‘one of the national banks’ works with NGOs to make microcredit available to
people in India.[40]
Research and development links
2.41
Australia’s formal research and development links with India are administered by DEST. The most important link point is through the management of
the Australia – India Strategic Research Fund(AISRF). Funding for the AISRF is
provided through the Australian Scholarships initiative which provides nearly AUD$1.4
billion over five years for educational scholarships in the Asia-Pacific
region. Through the AISRF it was expected that there would be a competitive call
for research proposals during 2006/7 in a number of agreed priority areas.[41]
The Submission from CSIRO also notes the expected benefits to that organisation
from Australia’s joint participation in the fund.[42]
2.42
DEST notes that science and technology research in India had been traditionally concentrated in the government sector through the Ministry of
Science and Technology. Recently there has been a significant increase of
Indian Government funding for research. During 2005-06, for example, the Indian
Government allocated a sum of A$3.8 billion for science and technology, an
increase over the previous year of 24 per cent.[43]
2.43
The fields of greatest emphasis for Indian governmental investment are
currently information technology, biotechnology, agriculture and agri based
industries and infrastructure sectors including energy, transportation,
communication and housing. India is now focusing on integrating science and
technology into various policies and programs covering the economic, energy,
environmental and other socio-economic sectors.[44]
2.44
In its submission to the Committee, the CSIRO noted that interactions
with Indian research organisations on joint projects totalled 32 per year.
Areas of association included the fields of agribusiness, environment and
natural resources, radioastronomy, manufacturing and construction and minerals
and energy. [45]
Biotechnology and related fields
2.45
Official research and development links between Australia and India continue to be, like educational links, a growth point in the relationship.
A 2007 survey prepared for DFAT noted that there was ‘strong scope’ for
partnering and collaboration in numerous research fields, notably in
biotechnology but also in areas such as nanotechnology and bioinformatics’.[46]
2.46
Anticipating a surge in the Indian biotechnology market, AusBiotech
signed an MOU with India’s peak biotechnology industry body, the Indian
Association of Biotechnology Led Enterprises (ABLE), in October 2004. An Indo-Australian
Conference on Nanoscience and Nanotechnology was held in Bangalore in March
2006. Then Prime Minister Howard announced a new A$25 million bilateral
research and fellowships program and a new MOU on biotechnology was signed
during his visit to India in March 2006. The new MOU will complement existing
agreements between Australia and India in science and technology and education
and training signed in 2003.[47]
2.47
In evidence to the Committee, Dr Majumdar, Director, Asia, Hunt and Hunt
Lawyers noted that Australia had an already established reputation in the
biotechnology field and that India is making progress in the field of bionic
stem cell research. This could be one field where research cooperation with Australia might lead to useful discoveries.[48] Other possible areas of
research interest include defence aerospace technology, business law, IT and
pharmaceuticals.[49]
2.48
DEST’s submission to the Committee also mentioned the 2006 MOU with the
Indian Department of Biotechnology (DBT). As part of this agreement a Joint
Biotechnology Committee has been set up.
2.49
In a submission to the inquiry, the WA Department of Agriculture and
Food noted that it had participated in the Wool Industry Technology Transfer
Initiative (WITTI) of 1998-2002, which provided capacity building and training
of Indian university lecturers in India for the transfer of technology training
for Indian wool manufacturers.[50] Other agricultural
research links sponsored by the WA Government included assistance in the areas
of grain and legume crops yield improvement research to various Indian
universities and research institutes.[51]
Committee comment
2.50
The Committee notes the observation in the WA Government’s submission
that there is ‘very little or no collaboration between Commonwealth or State
governments on research and development initiatives undertaken across industry
sectors in India.’[52] Should this be the case,
the Commonwealth should ensure that the appropriate agencies coordinate
relevant information so that a complete picture of research cooperation
initiatives involving Australia and India is maintained.