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Turnbull is right to push for closer ties with India

David Speers
April 12, 2017

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By David Speers

After a tour of the relatively modern Akshardham Temple complex in New Delhi, Malcolm Turnbull and Narendra Modi sat on the steps with their shoes off. They had already spent 90 minutes together earlier in the day in a more formal setting, discussing the bilateral relationship.

This was a chance for a more philosophical reflection on where India has come from and where it’s going. Its history, its achievements and its future role in global leadership.

Turnbull came away convinced India is on track to become an “economic superpower”. With that comes the military and strategic clout to match. In an interview for Sky News, the Prime Minister told me India will match the US and China in size and strength. Its population is forecast to pass that of China’s within five years.

Turnbull argues the rise of India is a good thing for Australia. “India will be a force for stability in the region”, he says. “India is committed to the rule of law”. He doesn’t say it, but the inference is clear. The other great power in the region, China, is not.

In fact, while he was in India, the Prime Minister was more assertive than usual about China. When I asked him about North Korea and its nuclear threats, he told me China was “clearly not doing enough” to put pressure on its neighbour.

This tougher tone from Turnbull in India will have been noticed in Beijing.

Australia has shown a remarkable ability to balance its relationships with the United States and China under various administrations.

Sure, there have been some spectacular highs and lows, but over the past 20 years, Australia has been deft at maintaining a trusted alliance partnership with the US and developing a vital trade relationship with China.

India is trying to emulate our success. It needs to keep its relationships with the US and China on positive terms and is looking at how Australia has managed this balancing act.

Turnbull’s visit to India had one primary aim: to demonstrate Australia wants to accommodate the rise of a third global power. Turnbull sees a world where the US, China and India share the stage. He wants to ensure that is achieved peacefully and to the benefit of Australia. 

Strategically and economically, this makes sense. With or without a free trade agreement, Australia needs to deepen ties with India.

Chances are there won’t be a free trade agreement any time soon. India remains a tough place to do business for Australian companies. Tariff barriers are high, state and federal regulations are a minefield, intellectual property rights are often ignored and bribery remains a problem.

Free trade talks have been underway for two years, but there’s no sign of movement on the main sticking points. India’s not budging on farm tariffs. Australia’s not going to let in more Indian workers.  

The only thing Turnbull and Modi could “announce” on this visit was that their chief negotiators would report back on the main sticking points quickly. It was a nice line to buy time, but the two leaders know exactly why the negotiations have bogged down. It’s just too politically difficult for India to threaten farm jobs and for Australia to threaten Aussie jobs.

Some Australian industry figures are privately frustrated at the lack of enthusiasm from both sides on the FTA. Nonetheless, they’re getting on with it and trying to take advantage of trade opportunities where they can. And this is the point. An economy-wide agreement that guarantees genuinely free trade isn’t going to happen in our lifetimes. But step by step, gains will be made. Some barriers will be removed. Australia will sell more coal, gas, uranium and higher education to India.

Turnbull is pushing opportunities wherever he can see them, including strong support for the Adani coal mine in Queensland’s Galilee Basin. He oversells the benefits, suggesting it would create “tens of thousands” of jobs. Even the company isn’t that bullish. And he’s not ruling out pumping nearly $1 billion of borrowed taxpayers’ money into a rail link for the mine. This would be crazy. Mining projects in Australia need to stand or fall on their own merits, without taxpayer help. 

Turnbull, though, is right to push for closer ties with India. This country will be a great, democratic, global power. Australia has much to gain and nothing to lose by engaging more deeply.

Published: Thursday, April 13, 2017

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