India, explained.
Howzat? An enthusiastic fan at the ICC World Cup Semi Final at Old Trafford, Manchester, 2019 (Martin Rickett via Getty Images)
Canberra and New Delhi could forge deeper ties as compensation for America’s changing regional priorities.
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The fallout for Australia from US-India tensionThe fallout for Australia from US-India tension
The current tension in US-India relations is not just a bilateral issue. It has implications for Australia’s relationship with India.
In strictly bilateral terms there is every reason to believe that the positive momentum in Australia-India relations will continue. But the reality is that the Australia and India relationship does not swim in its own undisturbed lane.
Strong US-India relations are not a pre-requisite for strong Australia-India relations. But there is no question that the uplift in US-India relations stretching back to the US-India nuclear deal, led by President George W Bush, made the uplift in our own relationship with India easier, including the change in Australia’s position on exporting uranium to India.
Are we now seeing a reframing of the strategic rationale of US-India relations, or is this a dispute over trade and market access that will in time be resolved?
To pose that question invites an even bigger question.
Is President Donald Trump walking away from the idea of India as a crucial player in a collective push back against China’s ambition to become the regional hegemon?
This is not just a question for the US-India relationship. It goes to the heart of the strategic congruence which has defined Australia-India relations.
Both countries have reached a point where each sees value in a deeper partnership irrespective of the trajectory of the US-India relationship.
Up to now, Australia saw India as a key element in the balancing of China, and we saw that balancing as led by the United States and including other countries, such as Japan which, for their own reasons, were uncomfortable with a Chinese hegemony.
That was the clear but rarely publicly articulated objective of the Quad. Does it remain so and will Quad leaders meet in India later this year? We know that the State Department and the Pentagon are Quad enthusiasts but is Trump? The President’s instincts are unilateralist whereas the Quad is premised on collective action. Also the Quad is primarily a geopolitical construct while Trump’s world view is geo-economic at best.
Nor do we know what Trump’s broader view of China is. All the signs point to him wanting a big deal with China. But what kind of deal and where would it leave India and Australia?
Will it be confined to trade and tariffs or will it also be a strategic accommodation? And if so, will that extend all the way to a G2 arrangement where the US essentially acknowledges a Chinese sphere of influence? Unlikely, but that would be a very different world for Australia and India.
India’s Sajan Prakash on his way to winning a swim-off against Australia’s Kieren Pollard at the 2022 Commonwealth Games in Birmingham (Martin Rickett/PA Images via Getty Images)
If US policy on China shifts, we will need to reframe the Australia-India strategic relationship. Just what that reframing will entail will depend on how both Australia and India recalibrate their own strategic settings.
If it pushes India further down the path of a narrow strategic autonomy, back to India’s old non-aligned days, the strategic relationship with Australia would diminish. But it could also go in the other direction, if both Australia and India decide that a shift in US policy requires even deeper compensating relationships in the region. This is the more likely outcome because both countries have reached a point where each sees value in a deeper partnership irrespective of the trajectory of the US-India relationship.
The economic pillar of the Australia-India relationship is also not insulated from broader trends in the global economy. Trump’s tariff hammer is likely to result in slower growth in global trade flows and could also have consequences for global investment. This could mean slower growth for the Australian and Indian economies even if our bilateral economic relationship with India continues to grow.
In all of this India is beginning to rethink its policy on market access. This is still well short of a Damascene conversion, but it should make the conclusion of the so far elusive Comprehensive Economic Cooperation Agreement a more realistic prospect. Australia will, however, need to be alert to the risks which any India-US FTA might present to our access to the Indian market, especially in agriculture.
About the author
Peter Varghese
Peter Varghese is chair of the Asialink Council, Chancellor of The University of Queensland and a former Secretary of the Department of Foreign Affairs and Trade.
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