India and Australia are looking to conclude a comprehensive trade agreement by the yearend to build on market access achieved through an initial deal and to move both sides into new areas such as renewable energy and digital trade, Australia’s outgoing high commissioner Barry O’Farrell has said.
Australia is also hopeful of “practical outcomes” by the yearend in cooperation on critical minerals, key for India’s ambitious plans for electric vehicles. The migration and mobility partnership agreement signed recently by the two sides “puts us at almost the leading edge of access by Indians to Australia”, he said in an interview.
Increasing defence engagement between India and Australia, both bilaterally and multilaterally, has shown that “working together can be and is a deterrent” to acts of coercion across the region, O’Farrell said. He said Australia is “seeking to stabilise, not normalise,” the relationship with China through recent engagements with Beijing.
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Asked if the timeframe set by both sides for finalising a comprehensive economic cooperation agreement (CECA) by the end of 2023 is doable, O’Farrell replied, “I think it’s more likely the last quarter, and… the Indian system wants it done before we move into 2024 and the elections that that brings with it. We’ll be looking to build on the market access we achieved in the ECTA [Economic Cooperation and Trade Agreement], we’ll look to move into newer areas where we’re cooperating – electronics, renewables, digital trade.”
He added, “When you’re a democracy, the trade deals…have to be saleable to the electorate. That was the approach we took with the ECTA…and I think that’s the path on which a future trade deal will be concluded.”
Australia’s pension funds, among the largest in Asia, and banks such as Macquarie Bank are keen to invest in India, especially in infrastructure.
“[There’s] US$184 million being invested in infrastructure this year,” he said.
This interest is not only because of India’s growth rate but also for the “practical application of Australian funds to assist” in development.
O’Farrell, who did his first and last interviews in New Delhi with HT, said he was hopeful of “practical outcomes” in cooperation on rare earths by the yearend.
India’s Khanij Bidesh India Ltd (KABIL) has the mandate to invest in securing offtake agreements for critical minerals in Western Australia. “We have elements to assist India’s growth objectives and we rely on India for our economy, because we’re now largely a services economy in Australia,” he said.
Defence engagements between India and Australia got a boost with the signing of the Mutual Logistics Support Agreement in 2020 and Australia’s inclusion in the Malabar naval exercise the same year, and O’Farrell said: “What we will see is more complexity occurring. I think trust becomes a habit and [leads to] instinctive collaboration.”
He referred to military aviators from the US, Britain and Australia working with the Indian Air Force for Exercise Shiksha in 1963 in the aftermath of a border conflict with China and said both countries are now cooperating in peace time. This sends “a message to the region that when… coercion or attempted coercion happens, working together can be and is a deterrent”, he said.
Asked about Australia’s recent engagements with China, O’Farrell replied: “I think the India-Australia relationship isn’t defined by our relations with any other country…What we’re seeking to do with China, which engaged in some economic coercion against Australia during Covid-19, is to stabilise our relationship.”
Australia is “seeking to stabilise, not normalise, relationships”, he said, adding, “We will continue to agree where we can. We will disagree where we must.”
The activities of pro-Khalistan elements is an issue “that is just as disturbing to the Australian government as it is to the Indian government”, O’Farrell said.
“We have laws around graffiti and a programme that now extends to Hindu temples in Australia, for the protection and security of places of worship. But it’s an irritant to us because we are a successful multicultural, multi-faith community that has been devoid of this sort of activity,” he said.
