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Should India be a priority for PM Abbott?

Posted By on September 11, 2013 @ 13:00

[1]Last week over on The Interpreter, Danielle Rajendram criticised what looks like the absence of India from PM-elect Tony Abbott’s priorities in Asia [2]. China, Japan, South Korea and Indonesia are at the top of the list of countries for the new PM to visit, and India isn’t. But the PM can’t go everywhere first, and it’s hard to think which of these countries should be bumped further down the list to make room for India.

India is eminently deserving of attention. It’s the world’s 10th largest economy [3].  It’s also a democracy, so we feel more confident that New Delhi wants the sort of world that Canberra and Washington want, and it abuts the world’s most important maritime trade route. It looks like a natural partner for Australia, which is why we have a reasonably strong diplomatic and economic relationship with India.

But we aren’t asking ‘Is India important?’—of course it is. What we’re asking is which countries should be the highest priority for the new Australian PM. That means identifying those countries that can provide us with the greatest opportunities, or where we can seek to mitigate our most serious risks.  It’s hard to make the case that India should be in that top bracket.

On the economic front, India is very important to Australia. Its strongest role from our perspective is as a market for Australian exports. But even as an exporter, with a 4.7% share it’s behind everyone on that list but Indonesia [4] as a buyer of Australian goods and services.

As a two-way trade partner, it’s even further behind in 10th place, with only 2.8% share; that’s less than Thailand, Malaysia, or Singapore. India’s growth has also been volatile—after a striking 10.5% annual GDP growth in 2010, it grew slower than Australia last year [5]. And just at the moment its economic outlook isn’t rosy [6].

So it’s an important economic partner over the long term, but not a plausible candidate right now for the top bracket of Australia’s relationships on economic grounds.

It’s an even harder case to make on the basis of foreign policy. Because of our alliance with the United States (and our economic relationships in the region), Australia’s strategic risks are concentrated in the waters of East Asia, where America and its allies face intensifying competition with China. The effort to mitigate those is best focused on countries that are major players in that region, and our large near neighbour Indonesia. In fact, if we add the US, then that’s Mr Abbott’s list.

India is too strategically inert to play a significant role in mitigating the risks to Australia that are inherent in East Asia’s changing power relativities—at least in the near to medium term. And if that changes, it won’t be because of Canberra’s relationship with New Delhi, but because of a more complicated set of relationships including Tokyo and Washington. And it’s difficult to see how closer ties between India and Australia could seriously benefit the security of the Indian Ocean’s massive trade routes (which I’ve written more on here [7]).

India is important to Australia. 5% is a big slice of our export market, and it’s hard to overlook a country of 1.2 billion people. And it may well become more important in the future. It’s just further down the list than our partners in East Asia like Japan and South Korea, because it isn’t as important economically, and it doesn’t provide us with the same opportunities to mitigate our strategic risks. Mr Abbott’s suggested itinerary looks good, so let’s hope there isn’t too much pull to the Indian Ocean from his West Australian cabinet colleagues in Foreign Affairs and Defence.

Harry White is an analyst at ASPI. Image courtesy of Wikimedia Commons [8].



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URL to article: https://www.aspistrategist.org.au/should-india-be-a-priority-for-abbott/

URLs in this post:

[1] Image: http://www.aspistrategist.org.au/wp-content/uploads/2013/09/Indian_Flag.jpg

[2] the absence of India from PM-elect Tony Abbott’s priorities in Asia: http://www.lowyinterpreter.org/post/2013/09/05/India-missing-from-Abbott-Asia-priorities.aspx

[3] world’s 10th largest economy: http://databank.worldbank.org/data/download/GDP.pdf

[4] it’s behind everyone on that list but Indonesia: http://www.dfat.gov.au/publications/tgs/index.html

[5] grew slower than Australia last year: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?order=wbapi_data_value_2012+wbapi_data_value+wbapi_data_value-last&sort=desc

[6] economic outlook isn’t rosy: http://www.economist.com/blogs/banyan/2013/08/indias-economy?zid=306&ah=1b164dbd43b0cb27ba0d4c3b12a5e227

[7] here: http://www.aspistrategist.org.au/indo-pacific-listing-our-interests-not-making-strategy/

[8] Wikimedia Commons: http://commons.wikimedia.org/wiki/File:Indian_Flag.JPG

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