Australia urges India to play a greater role in shaping regional trade order

  • India and Australia could strengthen the economic order in the Indo-Pacific, says Australian envoy
  • The two nations could also finance infrastructure in the Indo-Pacific region, the envoy adds

Elizabeth Roche
Updated12 Jun 2019
India has been going slow on RCEP negotiations as it is wary of China’s presence in the grouping.
India has been going slow on RCEP negotiations as it is wary of China’s presence in the grouping.(AFP)

Australia on Tuesday urged India to play a greater role in shaping the economic architecture of the Indo-Pacific region and help successfully conclude talks to forge a new regional trade bloc, the Regional Comprehensive Economic Partnership (RCEP).

India and Australia have developed mutual trust over the past decade to work together on strategic issues in the Indo-Pacific region, Australia’s high commissioner to India Harinder Sidhu said on Tuesday. The two countries could now work together to strengthen the economic order in the region, Sidhu told the Indian Association of Foreign Affairs Correspondents.

If India plays its part to successfully conclude the RCEP, it would help New Delhi integrate into the economic landscape of the Indo-Pacific, the high commissioner said.

“India is a leader and an Asian and Indo-Pacific powerhouse. So, for that reason, I think it’s important that India plays a greater role in shaping the regional trading order,” Sidhu said.

“Successfully concluding the RCEP, which includes India, China, and Asean (Association of Southeast Asian Nations) countries, as well as Australia and New Zealand, will help shape the regional rules and the norms governing trade,” she said.

India has been going slow on RCEP negotiations as it is wary of China’s presence in the grouping, with which New Delhi already has a massive $60 billion trade deficit. Indian industry apprehends greater market access to China could harm key manufacturing sectors such as steel and textiles. It has also been worried about giving greater market access to other non-free trade area partners, including Australia and New Zealand.

Another area in which Australia and India could work together was financing the infrastructure in the Indo-Pacific region, Sidhu said. The high commissioner did not mention any country by name, but the statement comes against the backdrop of China unveiling its ambitious Belt and Road Initiative, which looks to connect Asia, Europe and Africa through a series of roads, ports and railway lines.

Australia has announced plans to help investment in the Pacific, South-East Asia and South Asia, Sidhu said.

This is the result of India and Australia “shaking off our own hesitations of history” and working together in far more forums at the Indo-Pacific level, she added.

The quadrilateral grouping of the US, Australia, India, and Japan, known as the “Quad”, was a manifestation of this cooperation, she said, pointing to other formats of dialogue such as the Australia-India-Japan talks and the Australia-India-Indonesia talks, besides larger fora such as the East Asia Summit.

On the bilateral front, the “tempo” of activity was growing with both countries having concluded a major naval exercise recently, which was the “largest and most complex of its kind”. Activities in the defence arena had shown a fourfold rise from 11 events in 2014 to 38 in 2018.

One area that was performing below potential though was bilateral trade, Sidhu said. Australian exports to India had doubled between 2013 and 2018 from 11 billion Australian dollars to 22 billion Australian dollars. India is now Australia’s third largest export market after China and the US, she said, but added that despite all these numbers “our two-way trade with India is the same as our two-way trade with New Zealand”. “So, that gives you a sense of the scope for expansion.”

The Australian government had commissioned an India Economic Strategy, which looks at ways to improve trade. It had set up a trade target of $100 billion by 2035, Sidhu said.

India, too, on its part, had commissioned an Australia Economic Strategy and this was a welcome move, given that a strong economic relationship forms the “glue” in any relationship, Sidhu said.

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