India-Australia summit and signals to China

After a riposte to China's bullying tactics, India must now focus on the economic pillar of the Indo-Pacific strategy

Prime Minister Narendra Modi and his Australian counterpart, Scott Morrison, made history with their virtual summit on June 4. They upgraded India-Australia relations to a Comprehensive Strategic Partnership, issued a “Shared Vision for Maritime Cooperation in the Indo-Pacific” and concluded as many as nine bilateral agreements, of which the Mutual Logistics Support Agreement(MLSA) is the most significant. The two countries have now raised their bi-annual 2+2 bilateral foreign and defence secretary level talks to the ministerial level. This is noteworthy as this format is currently confined to the US and Japan. This means that India now has institutionalised high-level political and security dialogue with each member of the Quad. 

The Quad may be an informal consultative forum for security in the Indo-Pacific but it is already convening at the ministerial level. The next logical step would be to invite Australia to participate in the annual Malabar naval exercises from which it has been excluded so far. The conclusion of the MLSA points in that direction. The Quad is beginning to crystallise as the core of a countervailing coalition aimed at preserving a balance of power in the connected ocean space of the Indian and Pacific Oceans. China’s maritime strategy has two dimensions, one is to establish singular dominance in the Yellow Sea, the Taiwan Straits and the South China Sea. The other is to expand its naval presence into the Indian Ocean. The acquisition of port facilities in Myanmar, Sri Lanka, Pakistan and Djibouti is part of this strategy. The Quad’s Indo-Pacific strategy aims at constraining China’s maritime expansion in a region where both resident and major powers have significant security and economic interests. 

The outcome of the summit is important because it is a deliberate and unmistakable riposte to China’s recent bullying tactics both against Australia and India. Australia has been at the receiving end of offensive bluster and cancelled commercial contracts having dared to call for an independent investigation into the origin and the spread of Covid-19 from China to across the world. Australia, having joined the US, Canada and the UK in expressing concern over China’s decision to adopt a national security law for Hong Kong, also invited strong criticism. Relations had already been strained over the past few years due to China’s blatant interference in Australia’s domestic politics and influence buying. 

Illustration by Binay Sinha

 

Since Australia is heavily dependent on China for its mineral and food exports, tourism and large Chinese student population, there has been hesitation in confronting China, which is willing to use economic leverage to punish Australia. As for India, the spate of serious skirmishes at the India-China border, coupled with dire warning that India should not align itself with the US and indeed with other Quad partners, may be seen as upping the ante against New Delhi. Judging by the summit outcome, neither country has succumbed to Chinese pressures. On the contrary, China’s overbearing tactics have had the opposite effect of strengthening a hitherto hesitant coalition. This is a good thing. The Chinese should know that the more they seek to trample upon the interests of other countries in the region, the stronger will be the push-back.

There are legitimate concerns about US unpredictability especially under Donald Trump. It is possible that the US may not be as committed to maintaining a strong presence in the Indo-Pacific as in the past. This is all the more reason for countries, such as India, Japan and Australia, to work closely together to compensate for American distraction. Their cooperation will be critical to Asean being able to resist Chinese domination. Maintaining “Asean centrality” will be an illusion if China gets to set the rules of the game, economic and security, in the region. Asean may have no option but to accept the one-sided Chinese version of the Code of Conduct being negotiated. This gives China a virtual veto over decisions of Asean countries on security and commercial matters. It is encouraging that Asean has adopted its own Indo-Pacific Outlook, thus according legitimacy to the concept. The Quad countries need to reach out, both bilaterally as well as in concert, to Asean countries, in particular Vietnam and Indonesia, which have recently become victims of aggressive Chinese activities in the seas close to their coasts. They will not wish to be caught in a cross-fire between China and other major powers, but neither do they wish to be reduced to mere appendages to a dominant China. This will require more subtle diplomacy on the part of the Quad.

While India has been successful in creating a network of strong security arrangements with its Quad partners as also with Indonesia, Vietnam and Singapore, it is the economic pillar which may prove to be the weak point in its consolidation. India and Australia were close to concluding their Comprehensive Economic Partnership agreement (CEPA) in 2014 but that moment of promise was belied. Attention was then focused on concluding the Regional Comprehensive Economic Partnership (RCEP) which would have been an ambitious free trade and investment agreement among the 10 Asean countries, China, South Korea, Japan, India, Australia and New Zealand. Unfortunately, India has walked out of the agreement and has ceased to matter as far as the region’s future economic trajectory is concerned. Strong security presence cannot be a substitute for a vibrant economic engagement. This insistent reality escapes our decision-makers’ attention. One draws some encouragement from the leaders’ commitment to resume negotiations on the India-Australia CEPA. Perhaps this will open the door to reviving more dynamic economic diplomacy not only with Australia, but with the region too. 

India’s higher security profile is welcome in the region because it promises a more balanced security architecture in the Indo-Pacific. However, India as a large and expanding economy, must also become a significant economic partner for the region, offering opportunities comparable to what China does. India must follow up its resumption of trade negotiations with Australia with a return to the RCEP. A confident Indo-Pacific strategy cannot be sustained by a policy of economic timidity.

The writer is a former foreign secretary and is a senior fellow, CPR