Dousing the flames
The Age
Thursday November 12, 2009
INDIA has no shortage of suitors. The External Affairs Ministry in Delhi's grand Raj-era government headquarters is constantly churning out press releases announcing the arrival of foreign dignitaries. With its vast consumer market and growing political clout, governments across the globe are clamouring for India's attention.Today, Prime Minister Kevin Rudd €” who arrived in India yesterday €” will meet his counterpart, Manmohan Singh, in the capital.Australia has more in common with India than it has with any other Asian nation. The two countries share robust Westminster-style democracies, comparable legal systems, the English language €” and, of course, cricket. Both have a major strategic interest in the Indian Ocean.And yet the relationship has often been neglected. "Australia on its part has not taken India or the study of South Asia seriously for many years," says Australian National University India expert Professor Sandy Gordon. "This has translated in a whole lot of subtle ways into a sometimes ignorant and often uncaring attitude to India and South Asia, including among leading Australian officials. Thankfully, this attitude has been reversed in recent years, but its residue persists."The Rudd Government came to office vowing to put India at the "front rank" of its diplomatic relationships. But amid the lofty rhetoric there have been a series of setbacks.Only a few months ago, Hindu nationalists burnt an effigy of Rudd outside the Australian high commission in Delhi in protest at the spate of attacks on Indian students studying in Australia. Feelings are still running high over the assaults.Last week, demonstrators outside a one-day cricket match between Australia and India held signs saying "Racist Australians go back" and "Racism by kangaroos and welcome of Australian team in India can't go together".The placards underline how Rudd is arriving in Delhi at a delicate time for Indo-Australian relations. Two foreign policy decisions made early in his term raised questions in Delhi about his approach to India. One was Labor's refusal to lift a long-standing ban on uranium exports to India because it is not a signatory to the Nuclear Non-Proliferation Treaty. This reversed a Howard government decision to allow uranium exports under certain conditions.The second early irritant was Labor's decision to walk away from the so-called "quadrilateral dialogue" involving Delhi, Tokyo, Washington and Canberra.Beijing was implacably opposed to the grouping and Australia's Foreign Minister, Stephen Smith, revealed that the Government was stepping back from it while standing next to the Chinese Foreign Minister. This played badly in Delhi and created a perception that the Mandarin-speaking Rudd was more interested in strengthening ties with China than with India."Kevin Rudd began on a wrong note," says Brahma Chellaney, professor of strategic studies at Delhi's Centre for Policy Research."He created a perception of being a panda-hugging leader. His refusal to sell uranium to India reinforced that impression because uranium sales to India would be under stringent international conditions while uranium sold to China has no international safeguards of any kind."India's status as a nuclear weapons power was transformed last year when a nuclear co-operation deal between Washington and Delhi allowed India access to global nuclear trade despite its refusal to sign the NPT. India's new standing has made Australia's position on uranium sales more difficult to defend. Chellaney says Australia's reasons for not selling uranium to India are "specious".The recent chill between Canberra and Beijing, over issues such as the arrest of Australian mining executive Stern Hu, has not convinced Delhi's foreign policy elite that things have really shifted."There is still a view in Delhi that Australia weighs things up very carefully before they decide to do anything that may bother China," says Pramit Pal Chaudhuri, a Delhi-based foreign policy commentator. "New Delhi will want to get a feel for what Rudd's views are on China."Rory Medcalf, director of the international security program at the Lowy Institute for International Policy, says progress in the Australia-India relationship has been uneven and in some areas disappointing since Rudd came to power."In 2007, just before Rudd got in, you would have said energy, education and defence were three big pillars of the Australia-India relationship that were moving ahead really well. Two years later, uranium is on hold, foreign students have gone through a crisis and the defence relationship, although going well in terms of dialogue, hasn't had much progress on joint exercises and other practical matters. All three of those pillars were looking better two years ago."But the news is not all bad €” there have been some successes. Analysts from both countries say there is great potential for the relationship to leap ahead.Exports of Australian goods and services to India have risen at an annual average of more than 30 per cent over the past five years, outstripping even China. India is now the fifth-biggest market for Australian goods and services and is rapidly moving to become our third-largest export market.The potential of India's consumer market was underscored last week when the number of mobile phone subscribers reached 500 million.As with many other Asian trading partners, minerals and energy dominate Australia's exports to India. It is the biggest buyer of Australian gold and the third-largest customer for our coal and copper.There is a also growing recognition in Delhi that Australia could play a crucial role in its future energy security.The importance of energy exports was highlighted in August, when India's Petronet signed a 20-year, $20 billion deal with ExxonMobil to supply India with natural gas from the Gorgon project in Western Australia. This was the first long-term gas contract between the two countries.Meanwhile, Indian resource companies are making significant investments in the Australian minerals and petroleum sectors.Services exports to India have also been growing strongly thanks to the boom in education. However, blanket publicity about attacks on Indians in Australia is likely to take a heavy toll on enrolments, especially in the short term.India is Australia's second-fastest-growing tourism market and the number of Indian visitors is projected to grow at an average annual rate of nearly 20 per cent over the next decade.In 2007, the two governments began a joint study into the merits of a free trade deal but progress has been slow. More than two years after the study was launched, the two governments said last month they were working towards an "early finalisation" of the report. It is possible Rudd will have more to say about progress towards free trade during his visit to Delhi. But trade alone does not constitute a close relationship.LIFTING the ban on uranium exports to India would be a "magic bullet" to dramatically improve relations. But there is no sign that Rudd is going to reverse Labor's long-standing position on that issue any time soon.Even so, Medcalf says Rudd should give some indication to the Indians that Australia will be flexible on the issue in future."He needs a clever form of words that he can sell the Indians, such as, 'I am going to revisit this issue, trust me', which can also present in Australia as, 'I am not suddenly changing policy'. I think he needs to somehow give the Indians a hint this is a possibility."Medcalf expects Rudd will announce a boost to Australian diplomacy in India. "Without more resourcing of Australian diplomacy in India we can't engage with the Indians across the full spectrum," he says. "At the moment, there are parts of India that we just don't reach."Rudd will continue Australia's diplomatic charm offensive to try to limit the damage caused by attacks on Indian students in Australia. The visit follows trips by his deputy, Julia Gillard, in September and Foreign Minister Smith last month.The Indian Government has not allowed the student controversy to significantly affect bilateral ties but it will expect to hear more about how Australia is tackling the problem."Rudd will be expected to show up with a list of things that the Australian Government has done on the students issue," says Chaudhuri.Medcalf released a paper on Monday calling for India and Australia to develop a much closer strategic partnership."The relationship will weather recent turbulence. But without major diplomatic initiatives soon, the prospects for a truly strategic partnership between these Indian Ocean democracies will be set back for years."Defence ties have significantly improved recently, but Medcalf says that has not translated into practical co-operation such as regular joint exercises.The mutual interest India and Australia have in the Indian Ocean has the potential to drive closer strategic co-operation."We are starting to find India exert itself diplomatically in the Indian Ocean," says Chaudhuri. "India is trying to make it clear in as understated and quiet manner possible that the Indian Ocean is a crucial element in its security architecture, and immediately Australia has to be a part of that."Medcalf says: "The challenge for Rudd is to define what a strategic partnership is and to define what genuine substance can be put into that."Rudd's visit comes at a crucial time. With so many countries demanding a hearing in Delhi, it will only become more difficult for Australia to forge closer ties with India as it cements its place as a major world power.Matt Wade is South Asia correspondent.
© 2009 The Age
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