Australia and India: The Strategic Outlook
9 September, 2008, Confederation of Indian Industries, Chennai
Thank you for that very warm welcome.
It is a great pleasure to be here in Chennai to speak to you about the relationship between India and Australia and about our common future.
I thank the Confederation of Indian Industries for supporting this event and I look forward to a discussion with your members when I conclude my remarks.
Chennai is one of the great drivers of the tremendous economic growth India has experienced in recent years. In many ways it is Australia’s gateway to India and a vital link in the strong economic relationship our countries are building.
Through that relationship, Australia is inextricably interwoven into India’s future growth.
But commercial ties are only one part of a relationship we look forward to further developing and broadening.
As India’s economic weight has grown, so has its strategic view broadened. This means that our strategic interests, particularly in the Asia-Pacific region, increasingly intersect. As India looks to the east, Australia also looks west.
Today, on the occasion of my first visit to India as Foreign Minister, I want to highlight those areas of shared strategic interest.
I also want to detail how we are shaping Australian foreign policy to serve those common interests, including through our commitment to take our bilateral relationship with India to the front rank of our international partnerships.
An Indian Ocean perspective
I flew here last night from Perth, my home town, another great Indian Ocean city.
Like many travellers between Perth and Chennai, I lament that there are no direct flights and urge them upon our respective airline industries.
Chennai is of course closer to Perth than Shanghai is to Sydney.
Aside from the Indian Ocean that links us, Perth and Chennai are joined by strong sporting, cultural and business ties.
This morning I had the pleasure of visiting the MRF Pace Academy, directed by the legendary Western Australian fast bowler Dennis Lillee.
His bowling exploits at the WACA are well known to me as the WACA is in my Perth electorate.
One of the current greats of Western Australian cricket, Mr Cricket himself, Mike Hussey, played for the Chennai Super Kings in last season’s Indian Premier League.
This audience will also be quick to remind me that India’s cricketers excelled at the WACA earlier this year.
While cricket has for some time now been a particularly lively part of our relations, other areas are catching up fast.
Last year our bilateral merchandise trade relationship was just short of A$11 billion.
Tamil Nadu’s Chennai and Tuticorin ports serve as important gateways for Australian goods to the Indian market.
Almost half of that bilateral merchandise trade in 2007 was with Western Australia, making India my State’s 4th largest export destination. Gold, alumina, iron ore and other resource products dominate these exports.
Western Australia’s minerals and petroleum resources sector will continue to contribute to India’s strong growth and Western Australia has welcomed recent Indian investment in that sector.
Burrup Fertilisers’ A$700 million development of the world's largest greenfield ammonia plant in Western Australia's resource-rich Pilbara region is the largest ever Indian investment in Australia.
Hindalco’s A$80 million purchase of the Nifty Copper Mine in Western Australia underscores the growing Indian interest in investing in Australia’s minerals industry.
Australian investment in India has continued to grow, passing the A$4 billion mark in 2007.
There are tremendous opportunities for further commercial interaction and Australian businesses have been quick to recognise this potential, particularly here in South India.
Leightons Contractors employed over a thousand people in Chennai to build the Nokia mobile phone manufacturing plant. Leightons has since won contracts to construct factories here for Flextronics and Motorola.
Tata Steel and Bluescope are working together to great effect. Their plant here in Chennai is doing well and has the capacity to expand. They will soon build their fourth plant near Kolkata.
Rio Tinto, one of Australia’s mining giants, has just signed a memorandum of understanding with the Hyderabad-based National Mineral Development Corporation.
Our expanding economic ties could be further boosted by a comprehensive bilateral Free Trade Agreement.
My colleague, the Minister for Trade, Simon Crean and his counterpart, Kamal Nath, have agreed that our officials complete the joint FTA feasibility study by the end of this year.
Our growing trade and investment links are being matched by expanding people-to-people links.
Much of this is being driven by the ever increasing numbers of Indian students attracted to Australia’s high quality education services.
Graduates from our universities – like Kiran Muzumdar-Shaw, the Chairperson and Managing Director of Bangalore-based Biocon India – do much to strengthen the network of ties between India and Australia.
There have been over 70,000 enrolments of Indian students in Australian education institutions already this year. Enrolments from India have grown at an average annual rate of 41 per cent since 2002.
This is underpinned by strengthening links between Australian and Indian educational institutions and by the Australia-India Strategic Research Fund, which is Australia’s largest bilateral scientific research fund.
India has a proud and vibrant tradition in science and mathematics.
In the early 20th century it was a humble and largely self-taught railways clerk from southern India, Mr Srinivasa Ramanujan, who revolutionised vital parts of modern mathematics.
Australia too has a proud history of scientific achievement.
Our two countries can do much more to harness our combined scientific creativity. It is scientific breakthroughs which power so many commercial success stories.
That is why I am so convinced that enhanced scientific cooperation should be one of the cornerstones of our relationship.
Australia’s 2006 census showed that the Indian community was the ninth largest ethnic group in Australia, at over 230,000. This number will grow now that India has become Australia’s largest source of skilled migrants.
Australia and India in the Asia-Pacific region
In the international arena, we share profound values and viewpoints which will guide us as we pursue common interests and confront common challenges.
India is the largest democracy in the world.
As India assumes the mantle of global influence accorded to it by its economic size and strength, its strategic weight in the world is naturally increasing.
India is now rightly making its voice heard in the corridors of regional and international fora. It will continue to make a strong and positive contribution to the great issues of the day.
Australia welcomes this because we see in India a country that combines a remarkable pace of domestic development with an active and constructive role on the regional and world stage.
India has global interests, but India’s expanding strategic role has increasingly focused on our shared Asian neighbourhood.
This is a natural progression of the imaginative and skilful ‘Look East’ policy launched by former Prime Minister Narasimha Rao in the 1990s.
Australia is firmly focused on the Asia Pacific region. On coming to office last year, the Government made it clear that comprehensive engagement with Asia and the Pacific would be one pillar of our foreign policy.
This century will be marked by an inexorable shift in global economic and strategic influence to the Asia Pacific. This historic transformation demands our constant and ongoing attention.
Within Asia we have the world’s two most populous countries, China and India, two of the top three economies, China and Japan, the largest democracy in the world, India, and the country with the largest Muslim population in the world, Indonesia.
China and India are adding their enormous energy to the already considerable economic strength embodied in Japan and Korea.
Australia is fortunate that our economic prosperity is tied to Asia’s rise and we have tremendous optimism about India’s future.
We look forward to deepening our engagement with India in South Asia.
In this context we have gladly accepted the recent invitation we received to participate as an Observer to the South Asian Association for Regional Cooperation (SAARC), and we very much appreciate India’s support for Australia’s participation in this forum.
The intersection of Australia and India’s interests in this region can be seen in our relationships with ASEAN. We cooperate closely in both the ASEAN Regional Forum and the East Asia Summit.
We have both recently concluded FTA negotiations with ASEAN. As The Hindu, whose editorial board I met this morning, recently editorialised, the FTA agreement “marks another milestone in New Delhi’s ‘Look East’ policy”.
APEC is the other regional grouping we consider vitally important. I’m proud of Australia’s role in helping to create that body in the late 1980s and early 1990s.
India is not yet a member of APEC. Australia’s strong view is that India should become a member when the membership moratorium ends in 2010.
APEC has played a vital role in promoting trade and investment liberalisation and business facilitation. It is now engaging on the challenge of structural reform behind borders.
APEC also reinforces the United States’ engagement in our region, something Australia regards as essential.
Each of these regional fora, ASEAN itself, the ASEAN Regional Forum, the East Asia Summit, SAARC and APEC, makes a unique and positive contribution to regional relations and regional cooperation.
But there’s no single piece of architecture, or mechanism, in which all the interested parties can be in the same room at the same time and speak about shared economic, investment and trade issues, and also about strategic or security matters.
Just as India is not a member of APEC, the US plays no role in the East Asia Summit.
This is why Australian Prime Minister Rudd recently launched an initiative to engage our neighbours in considering how the Asia Pacific regional architecture might evolve to meet future strategic, security, economic and political challenges and opportunities.
I discussed this issue with External Affairs Minister Mukherjee on his recent visit to Australia and look forward to hearing more about the region’s future from the Indian perspective during my time here this week.
Strong regional institutions are needed in Asia because, as Mr Mukherjee highlighted in his address to the Asian Security Conference earlier this year, the region faces many security challenges.
The challenges are not only those that arise through strategic shifts with their attendant risk of conflict and disagreements.
Non-traditional factors like climate change, international terrorism, weapons proliferation, transnational crime, environmental degradation, energy security and health pandemics continue to prove a threat to our security.
These are challenges that face us all and they demand genuinely global responses. In this, India has an essential role to play as it emerges as a great power.
We also want to see the United Nations reflect that reality. We strongly support a permanent seat for India on a reformed United Nations Security Council.
Australia itself is seeking election to a non-permanent seat at the United Nations Security Council for the 2013‑14 term. We have a record of long and active engagement with the Security Council and our wider contribution to the United Nations places us in good stead to serve again.
Shared Strategic Interests
We are determined to take our relationship with India to the front rank of our international partnerships. In doing so, we want to strengthen our shared approach to transnational challenges in our region.
The Indian Ocean provides more than a symbolic link for a strengthened strategic relationship. Australian naval vessels are now conducting more port visits in India than ever before. As I speak, HMAS Stuart is conducting a port visit to Mumbai, and tomorrow it will sail in a naval exercise with Indian naval units.
Shortly before we were elected to government last year Australia’s Navy joined the Indian Navy in multinational exercises in the Bay of Bengal and a three-day joint passage exercise. Australia was also an active participant in the inaugural Indian Ocean Naval Symposium.
Australia wants to further strengthen our defence links with India and we are particularly pleased to have reached an agreement this year that our Chiefs of Defence Forces will meet annually.
Australia and India are also working together to counter terrorism in our region. The 2002 Bali bombings brought home to Australia the threat of terrorism in Asia and we are deeply sympathetic to India as it faces ongoing terrorist threats.
Australians were shocked by July’s bombings in Bangalore and Ahmedabad. I again express Australia’s sympathy for the victims and their families.
No country has greater experience than India in combating terrorism. We value highly our annual Joint Working Group on Counter-Terrorism established under a 2003 MOU.
We agreed in June to strengthen cooperation in this area
by signing extradition and mutual assistance treaties during Mr Mukherjee’s visit to Australia. These are practical examples of how we want our security and counter-terrorism arrangements to be enhanced.
Valuable progress has been made in combating the threat of terrorism in our region but we cannot be complacent. We remain strongly committed to this work.
Afghanistan remains crucial in the fight against international terrorism.
We are acutely aware that Taliban success in Afghanistan would have terrible consequences not just for that country but for the entire region.
Modern international terrorism is very mobile, and from Afghanistan it can move north, to Europe, or to the south and east into Southeast Asia. Australians have tragically already been on the receiving end of the appalling consequences of terrorist activity in Southeast Asia.
We are particularly concerned about militancy and extremism in Pakistan's border areas with Afghanistan, which have a direct and deleterious effect on Afghanistan and the 1100 Australian troops serving there.
Australia has made it clear that we wish to cooperate with Pakistan to address the challenges it faces including by developing new aid programs in Pakistan’s border regions.
We are also looking at stepping up our assistance in areas such as law enforcement and defence cooperation including by strengthening Pakistan’s counter-insurgency capacity.
Australian troops serving in the dangerous southern province of Oruzgan are there because Australia’s presence and contribution in Afghanistan is, in our view, unambiguously in Australia’s national interest.
We are there to achieve two things: to make our contribution to efforts to promote peace and security through our military role; but also to assist in the vital task of nation building and capacity building.
In this context we are highly conscious of the role India is playing in Afghanistan’s reconstruction and welcome it.
This country is the fifth largest aid contributor and I understand that over 3,000 Indians are working on various projects in the Afghanistan.
I applaud these continued efforts, particularly in the context of the cowardly attack on your Embassy in Kabul this year.
Work in Afghanistan is hard and difficult and dangerous, but it is, in our view, essential work in the interest of the regional and the international community. So Australia is in Afghanistan for the long haul.
The challenge of nuclear proliferation is another issue which can only be addressed through effective multilateral action.
Nuclear weapons still pose a threat to humanity almost 40 years after the Non-Proliferation Treaty was signed. There remains a need for real progress towards that Treaty’s objectives.
That’s why Australia is establishing, with Japan, an International Commission on Nuclear Non-Proliferation and Disarmament, to be co-chaired by former Foreign Minister Gareth Evans and Ms Yoriko Kawaguchi, a former Japanese Foreign Minister.
Twenty years on, this is not unlike Prime Minister Rajiv Ghandi’s own nuclear disarmament initiative.
The Commission will aim to shape a global consensus in the lead up to the 2010 Nuclear Non-Proliferation Treaty Review Conference and beyond.
In pursuing this, we are very encouraged by the reaction we have received to date from both nuclear and non-nuclear weapon states.
India has a strong record on non-proliferation and shares our commitment to addressing this critical challenge and to achieving our ultimate objective of nuclear disarmament.
I welcome India’s positive approach to the International Commission on Nuclear Non-Proliferation and Disarmament and look forward to Indian participation in its work.
I also welcome the strong public reaffirmation of India’s support for disarmament and non-proliferation made by External Affairs Minister Mukherjee on 5 September.
As you know, on 6 September, the Nuclear Suppliers Group (NSG) adopted by consensus a policy statement on civil nuclear cooperation with India that will enable civil nuclear supply to India by those NSG participating nations who choose to do so.
Australia was positive and constructive in discussions in the NSG meetings on an India-specific exemption to the NSG Guidelines.
Australia supported the NSG consensus and we welcome the outcome which, as well as having non-proliferation benefits, reflects India’s rise as a significant power.
The Australian Government took into account the strategic importance of the issue for both India and the United States.
The Australian Government’s policy is not to supply uranium to non-NPT countries. That policy approach is of long standing and well known.
Our policy has also been, and remains, not to supply any other items to non-NPT signatories for use in nuclear programs. This position remains unaffected by the NSG decision.
This also does not disturb Australia’s ongoing approach to consider on a case by case basis applications for the export of dual use items.
Australia is mindful of India’s profound need for energy and resources.
As one of the world’s largest suppliers of energy and resources, Australia is working closely with India to promote trade in this sector. India is Australia’s fastest growing export market, and energy and resources are the main drivers behind this growth.
In any event, Australia’s relationship with India goes far beyond the export of one individual minerals commodity.
We have a broad-ranging relationship.
It’s one that can accommodate differences of opinion on particular issues, and can move forward constructively and positively.
Conclusion
We see India at the heart of a truly historic global shift in economic power and influence. Partly because I’m from Western Australia, I’m particularly conscious of India’s rise and dynamism.
Just before the end of last year I made my first speech as Australia’s Foreign Minister to the diplomatic corps in Canberra.
In that speech I made particular mention of India’s remarkable development and said I would work with the Indian Government and the Indian people to add depth and vigour to our relationship.
I stand by this early commitment today and am honoured to be making my first visit to India to further that commitment.
Our relationship already has a firm foundation in economic and social links. I am optimistic that the extent of our shared values and interests mean that we can build on those great strengths.
Our two countries are ready to enter a new era of cooperation on joint challenges and opportunities both in the region and globally.
Here in Chennai, my first port of call, I feel that sense of similar optimism about our futures. I look forward to sharing that with the leaders, officials and decision-makers I meet in the days ahead.
Thank you.