As the signing via hologram of the Regional Comprehensive Economic Partnership
(RCEP) approaches, one country looms large – India. Not for their involvement, (they withdrew from the process late last year, amidst their crumbling diplomatic relations with China) but for their importance as a vital trade partner for all parties signing the agreement.
Whether due to its concerns of a growing trade deficit, to soldier fatalities at a disputed border site
, India have opted out of the agreement, unwilling to sign.
Whilst the door has been left open for India by the remaining parties of the RCEP, which includes the countries of ASEAN, Australia and New Zealand, there are still many opportunities for our nation to strengthen the connection with India.
Based on data out of the international monetary fund, India’s losses due to COVID-19 will be impactful over the short and medium term
, however, Australia should be in the relationship for the long game, given the fact that based on pre-COVID forecasts, India was predicted to be the fastest growing global economy, surpassing the United States and the European Union by 2030
So where do the opportunities lie for Australia and India moving forward?
The Australia-Japan-India Trilateral Diplomatic Partnership
The Australia-Japan-India trilateral is in its infancy, and includes three members of the four member Quadrilateral Strategic Dialogue (also known as QUAD)
(which includes the United States). Even during the challenging times of COVID, the Australian government has committed to their relationships with Japan and India via virtual summits, held in June and July this year
. All three countries were early adopters of the Indo-Pacific regional concept, and share an outlook regarding the future of regional order, which emphasises free, open, inclusive and rules-based principles for governance.
Perth USAsia Centre’s recently launched a publication exploring the Trilateral
includes a foreword penned by His Excellency Reiichiro Takahashi, Ambassador of Japan to Australia, in which he suggests the three countries could unite to serve as a strategy equilibrium, ensuring the rule of law in the region, by further enhancing cooperation in diplomatic, economic and military areas.
Australia could potentially secure its place as a top supplier to India when it comes to cobalt and zircon, given our nation is one of the top three for global production of these minerals. Rare earths supply forms the foundation of a Memorandum of Understanding signed between the two countries during a virtual summit held in June this year
, and is expected to expand to using Australia’s reserves to supply many other critical minerals to India, including antimony, lithium, rare earth elements and tantalum. With India’s plans to move to full electric mobility by 2030, demand for rare earths are expected to rise.
United in Defence
Australia and India’s involvement in the QUAD, which also involves Japan and the United States of America, will soon see all four countries participate in naval drills. India holds these drills each year, which normally include the United States and Japan, and have agreed to include Australia in the exercises
, as a sign of cooperation between the QUAD countries.
Build on Coal Exportation
With whispers of China trade sanctions against Australia’s coal
, we could look to increase the current amount of coal being exported to India. Currently representing 45.3 trillion million tonnes of metallurgical coal to India
, which is around 25 per cent of our total metallurgical coal exports and just over 70 per cent of India’s import needs. India’s growing steel sector represents additional coal supply potential for Australia.
As both Australia and India look to emerge from protectionist policies, necessary during the global health pandemic, strengthening our relationship with India will be pivotal as both seek to recover economically. Whilst India continues to struggle with high COVID cases, and fatalities, experts believe they can have the virus under control by February next year
. To avoid the reputation of being a fair weather friend, Australia must continue positive discussions with India as their recovery continues, ensuring our nation’s future prosperity is built on diversity and strong partnerships within the burgeoning Indo-Pacific region.