Ambassador’s Lecture by H E Harinder Sidhu
Institute of South Asian Studies, Singapore
14 October 2019
(Check against Delivery)
Thank you Professor Mohan for that kind introduction.
Dr Malcolm Cook, distinguished guests
Just ten days ago, Australia’s Prime Minister Scott Morrison announced that he had accepted an invitation by Prime Minister Modi to visit India in January 2020. He described India as a ‘natural partner for Australia’ and said the visit was ‘another step in cementing India in the top tier of Australia’s partnerships.’
For watchers of Australia’s foreign policy, and in particular Australia-India relations, the invitation by the Indian Prime Minister, and Prime Minister Morrison’s description of India as a ‘top tier’ partner marks a significant transformation in how Australia and India see the bilateral relationship.
To be clear, relations have generally been good in the past. With the exception of a couple of instances in recent decades, Australia-India relations have been relatively benign. Unremarkable, really. But that we would always revert to the old chestnut of being bound by “Commonwealth, cricket and curry” always seemed to me to demonstrate just how thin the links were.
So what’s changed?
I would put it down to three factors, all of which have emerged over the past decade or so.
First, Australia has seen a substantial growth in its Indian-origin population. Today, one in 50 Australians (2%) is born in India and a further 1% of the population has Indian origins.
India has been our largest source of skilled permanent migrants for the past 3 years in a row; and it is the second-largest source of overseas students with over 90,000 Indians studying in Australia.
These numbers drive government and business interest in India but, as Australia has found with our other diaspora populations, over time they will anchor stable and sustained engagement.
Second, the past decade has seen India accelerate its emergence from a history of strategic and economic insularity. We have long talked about India’s potential as a major global power. What we are seeing today –albeit in fits and starts - is India moving toward meeting its potential.
And third, the change in the global environment that we are now witnessing – for example, the nexus between China’s economic power and its strategic rise, the tensions between the US and China and the accompanying strategic and economic uncertainty – have brought India and Australia closer together. It has brought those things that we have in common into sharp relief. Our shared commitment to democracy, sovereign freedoms and the rule of law have now become the basis for strategic alignment.
It is on these latter two factors I will focus today. In doing this, I want to sketch out for you how Australia sees India in our strategic frame.
I’d also like to explore where ASEAN fits in and in particular where Australia, Singapore and other Southeast Asian countries might work together with India.
The Strategic Story: the Indo-Pacific
Two years ago, Australia’s Foreign Policy White Paper put forward two key propositions relevant to our conversation today.
First, it placed India at the ‘front rank of Australia’s international partnerships’, reflecting our increasingly important economic relationship, our congruent security interests, our pluralist democracies and shared interests in upholding international law. This was the first time that a major Australian foreign policy document had placed India in such a prominent position.
Second, it fleshed out the thinking behind how we conceptualised the Indo-Pacific.
Before I go into that, it is worth noting that Australia began to use the term “Indo-Pacific” more than a decade ago. While this is reflective of Australia’s geography – we are, after all, a continent that faces the Pacific Ocean on one side and the Indian Ocean on the other – it has also served a couple of other purposes.
It draws India into our strategic concept. It also recognises that, going forward, many of the challenges we will face will be maritime in nature. So for Australia, a concept of the Indo-Pacific just makes sense.
The White Paper went beyond this to articulate the kind of Indo-Pacific we would like to see. We would like an Indo-Pacific characterised by respect for international law and other norms and open markets. We would like a region where our ability to prosecute our interests is not constrained by the exercise of coercive power.
To get there, the White Paper set out six elements to guide Australia’s policy, namely:
1. Strengthening our alliance with the United States
2. A strong and constructive Comprehensive Strategic Partnership with China, noting Beijing’s greater capacity to share responsibility for supporting regional and global security.
3. Working closely with the region’s major democracies, bilaterally and in small groupings. Central among these are our relations with the United States, Japan, Indonesia, Singapore, the Republic of Korea and of course India.
4. Supporting ASEAN centrality and unity, which includes a plan to ensure we are a leading security, economic and development partner for Southeast Asia.
5. Supporting regional trade, investment and infrastructure building so that they are inclusive and based on market principles.
6. Finally, the White Paper outlined plans to boost our defence engagement to enhance the capacity of our regional partners to manage security challenges, including on maritime security.
These principles have set the stage for the kind of strategic engagement we are now seeing with India.
We now have a strong web of strategic dialogue across every conceivable topic – from counter-terrorism and cyber affairs, to maritime security and defence science.
Our defence ties are at the forefront.
In April this year we held the third iteration of our bilateral naval exercise, AUSINDEX, which represented the largest-ever Australian defence deployment to India in peacetime.
The exercise built on a fourfold increase in our defence engagement — from 11 defence exercises, meetings and activities in 2014 to 38 in 2018.
We have held three rounds of our trilateral dialogue with India and Japan and are about to hold our 3rd meeting of our Defence and Foreign Affairs 2+2 dialogue at Secretary’s level, in December this year.
Unusually for Australia’s relationships in Asia, it is our defence and strategic partnership with India that has led the way on a bigger relationship, rather than our economic ties. Our two way trade with India has been growing steadily, but it stands at around $A30 billion and is relatively narrowly based.
This misalignment between our economic and strategic relationship with India is something that our government has recognised and is working to remedy. Last year, the Australian Government published a 500-page report by Peter Varghese – our former Foreign Secretary and a former High Commissioner to India – which detailed a strategy to build the economic relationship.
Titled An India Economic Strategy to 2035, the report focused on ten priority sectors and in ten priority states (out of 29) in India where Australia should concentrate our effort. The report’s core conclusion is that there is no market over the next 20 years which offers more growth opportunities for Australian business than India.
The report does not shy away from the very real challenges of doing business with India. It also makes the point that India is not China. To succeed, Australia needs to take India on its own merits.
What would success look like?
The report sets ambitious targets to raise India to being one of Australia’s top three trading partners; to increase Australian investment in India to $A100 billion by 2035 and to have people to people ties as close as any in Asia.
It also lays out a roadmap to get there. The Australian Government has accepted the report and implementation is now underway.
How we work with India in the Indo-Pacific
We recognise that a substantive economic relationship will help to sustain a growing strategic partnership with India.
An essential idea in Australia’s Indo-Pacific strategy is that a more active and engaged India is an important element in achieving our objective of a stable, secure and prosperous Indo-Pacific region.
This is more complex than the bald idea that India could provide a counterweight to China in the region.
What we need is a new strategic equilibrium in the Indo-Pacific. We need an order that reflects the modern world.
As Australia’s Prime Minister has said ‘we can’t be set and forget’.
International rules need to reflect China’s great power status and also India, whose share of global GDP could be on par with the United States (in PPP terms) by 2035. Deep US engagement will also be essential for maintaining stability and prosperity.
But all this has to be nested in the right environment.
Ultimately, ours is a push for integration, rather than isolation. For cooperation rather than unilateralism. And for engagement rather than autarky.
So, beyond Australia’s bilateral relationship with India, we are keen to see India play a greater role in the region, in line with its growing stature.
We have welcomed India’s support for an Indo-Pacific concept. The ideas that Prime Minister Modi sketched out here in Singapore last year at the Shangri-La Dialogue resonate strongly with Australia’s concept and, indeed with those ideas in the ASEAN Indo-Pacific Outlook this year, which we have warmly welcomed.
Like Australia, India has been open to engaging with others in different formats – in small groups, trilaterals and quadrilaterals. While they are resource-intensive, these groups are proving invaluable in allowing participants to build confidence and deep understanding.
There has been – if I may so – significant attention and some confusion among commentators about our engagement with the US, India and Japan as the Quad.
The Quad is just one of many forms of cooperation with countries in the region: important but not very different from other minilateral engagements. We have held four meetings of senior officials since 2017.
Last month in New York the Foreign Ministers of our four countries met together for the first time. We discussed our efforts to maintain and promote an open, prosperous and inclusive Indo-Pacific, highlighting our shared values and cooperation on maritime security, infrastructure and connectivity in support of rules-based frameworks.
Whether it is in the Quad, in bilateral discussions between governments, with business or engagements in the EAS and other regional forums, it is no longer possible to separate economic matters from strategic ones, if that ever was the case.
As diplomats we need to be proficient in both disciplines – to be bilingual, so to speak.
This is why I have been vocal in India about the value of India’s participation in RCEP. This has been, and continues to be, a matter of considerable debate in India.
As I speak, Trade Ministers have just concluded their meeting in Bangkok. Australia is making every effort to ensure that RCEP can be concluded at the East Asia Summit meeting this year.
In a recent op-ed in the Indian press, I spelled out the reasons why Australia thinks India’s participation is important.
In it, I pointed out that RCEP deals India into regional economic integration. It gives India a chance to help shape Indo-Pacific trade architecture, rules and standards, now and into the future.
More than that, India’s domestic economy stands to gain significantly.
RCEP offers India an opportunity to capitalise on its growth trajectory. The Indian economy is developing rapidly and becoming more globally oriented. RCEP has the potential to drive further domestic economic reform and the economic growth that is needed to fulfil Prime Minister Modi’s vision of India becoming a USD 5 trillion economy.
It will help create jobs, raise living standards and provide consumers with more affordable products and services.
Under RCEP, Indian businesses will be better integrated into regional supply chains, increasing their market access across the Indo-Pacific and driving export growth.
So, RCEP is important for India. And India is important for RCEP – we see India’s participation as essential for realising the full potential of the agreement.
Opportunities for Australia, India and ASEAN to work more closely
I have talked about Australia’s commitment to ASEAN centrality; our shared ideas about and engagement in the Indo-Pacific and also the importance of India’s participation in RCEP.
If I can narrow the focus a little, I would like to go a little deeper into where Australia, India and Southeast Asian nations can work together.
I believe ASEAN countries – but perhaps specifically here, Singapore - India and Australia can do more.
We may bring slightly different histories and perspectives in how we look at the region but there is remarkable overlap about how we look to the future.
We have the potential to build a strategic order which reflects the shared principles in ASEAN’s, Australia’s and India’s outlooks for the region: the importance of inclusive regional institutions, international law and open markets and opportunities for investment.
It its vital we make our perspectives heard in contributing to the new order.
India has extensive historical and cultural links as a civilizational power. India’s traditional non-aligned posture and leadership within South-South groupings has appealed to the ASEAN bloc.
This has given India a different focus for its engagement with Southeast Asia to Australia. However, we are now seeing increasing convergence.
There are now opportunities for ASEAN, India and Australia to go beyond dialogue and build practical cooperation in the region to bring our collective strategic outlooks to life.
Of these, maritime cooperation and connectivity stand out.
On maritime cooperation, we all support peaceful settlement of disputes, promoting maritime safety and freedom of navigation and overflight, and addressing transnational crime.
Both India and Australia already work with ASEAN and the ASEAN Regional Forum to promote cooperation on these issues.
We are also already conducting maritime exercises to support these objectives. Most recently, India, Thailand and Singapore conducted a trilateral maritime exercise.
India, Singapore, Malaysia, Indonesia and Thailand participated in Australia’s Exercise Pitchblack in 2018, a biennial multinational air exercise in northern Australia.
Connectivity is another area where we can do more.
In its Outlook on the Indo-Pacific, ASEAN has called for existing and future connectivity issues to complement and support the existing Master Plan on ASEAN Connectivity 2025.
ASEAN is providing leadership in building a platform for stronger regional connectivity.
Australia is committed, together with our partners, to sustainable, principles-based infrastructure investment that is transparent, promotes open competition, that upholds robust standards, avoids unsustainable debt burdens, targets the needs of nations of the region and promotes private sector investments.
Australia has announced new connectivity initiatives in the past twelve months. We will use our Southeast Asia Economic Governance and Infrastructure Initiative, worth A$121 million to unlock the next wave of Southeast Asia’s economic growth.
Australia’s Minister for Foreign Affairs launched in January the new South Asia Regional Connectivity initiative, known as SARIC. SARIC will focus on the transport and energy sectors and we will seek to support connectivity between South and Southeast Asia, a priority of both India and ASEAN members.
We have also seen India increase its contribution to regional connectivity.
India and Indonesia are exploring opportunities for greater maritime connectivity between their countries. And India is finalising construction of Sittwe Port in Myanmar, completing one of India’s signature infrastructure projects in Southeast Asia.
And with Singapore in particular, there are opportunities for us to do more with India.
Singapore has for a long time been a strong supporter of India’s regional engagement and ‘Act East’ policies. There is more we can collectively do to support India’s role in the Indo-Pacific and Southeast Asia.
There is remarkable overlap in our interests in openness and trade liberalisation, e-commerce and digital trade, quality infrastructure and the importance of a rules-based maritime order.
We should be creative in finding ways to encourage regional developments in these fields, working together through regional institutions, between governments and with business and civil society.
If there is one idea I can leave with you, it is this: now that the idea of an Indo-Pacific is taking hold, we need to think about what comes next.
It’s clear that we are in an evolving strategic situation. Just as our strategic environment evolves, so must our policy. How we conceptualise the Indo-Pacific, what the policy implications are and how we put those into practice – all these will need to be refined and to evolve continually.
But what is also clear is that we will need to be flexible in who we work with. Just as Australia and India are forging a fresh strategic partnership, so there is room to create other combinations of strategic cooperation. This is why I think there is a strong case for Australia and India to work together with Southeast Asian countries.
And finally, the emphasis is on the word “work”. Dialogue is very important and we should of course have lots of it. Trust and understanding are the backbone of any relationship.
But it cannot just be talk. Global challenges cannot be resolved by talk or by individual action. So we should pool our efforts to put our ideas into action – in infrastructure, maritime security, trade and connectivity.
This will take time, effort and resources. However, the dividends will go far beyond the physical outcomes, and will yield benefits in security and prosperity for millions of people and for a long time to come.