AUSTRALIA’S PIVOT TO INDIA

From cricket and movies to trade and immigration, Australia’s relations with India have moved progressively forward over the past two decades. This development has not passed the notice of Labor’s new federal MP for Parramatta Andrew Charlton. The Australian Financial Review has described Andrew Charlton as a “centrist, evidence-based, data-driven economist with entrepreneurial flair”. He is the author of Ozonomic and co-author of Fair Trade for All with Joseph Stiglitz. To discuss the growing influence of India in Australia’s foreign and trading relations, Andrew Charlton spoke for The Sydney Institute on Tuesday 22 August 2023.

AUSTRALIA’S PIVOT TO INDIA

ANDREW CHARLTON

I want to begin by acknowledging the traditional custodians of the land where we meet, and pay my respects to their elders past, present and emerging.

My first trip to India 20 years ago was to launch a book I’d written about global economics. As a young economist, I was struck by the audaciousness of India’s post-independence project to simultaneously build, without possessing much basis for either, a modern industrial economy and an egalitarian democracy.

Each time I went back to India I became more fascinated by its quixotic national journey from medieval powerhouse, to colonial vassal, to impecunious republic to its present incarnation as an emerging superpower.

Last year, when I was elected to Parliament I became the Chair of the Parliamentary Friends of India and began a writing project to explore India’s growth and its impact on Australia.

When I began writing the book, I had a sense that India’s relationship with Australia was on a strong trajectory, but I didn’t quite appreciate the extraordinary year that was in store for the bilateral relationship in 2023.

This year Prime Minister Modi visited Australia, becoming the first Indian Prime Minister ever to visit Australia twice. And by the end of this year Prime Minister Albanese will be the first Australian Prime Minister to visit India twice in one year. No less than 12 Australian ministers have travelled to India in this year – already a record – and it’s only August! This unprecedented level of activity is not an accident. It reflects the fact that India’s role in the world – and its importance to Australia – is accelerating perhaps more rapidly than any other country.

This year, India became the largest nation in the world by population – the last time that title changed hands was after the fall of the Roman Empire. And India is growing so quickly that by 2070 its population will rival China, the United States and the European Union combined. India also has the fastest economic growth of any major nation. It has the second largest armed forces and the fastest growing military capability in the world.

Projecting forward, it’s hard to overstate the influence of India on our world in the coming decades. Just as the twentieth century was dominated by the United States, and the nineteenth century was ruled by the British Empire, we may well end the twenty-first century with India on top.

But India’s inexorable superpower trajectory isn’t just evident in the numbers, it’s also palpable in the streets. Driving, running, selling, begging, cooking, shouting and sitting, there is a sense of anticipation among the people of India. In every city and village, you can feel the fast-dawning realisation that what happens here will change the world.

This is not all distant geopolitics. India’s rise is also changing Australia at home. Migration from India has massively accelerated in the last three decades.  Indian Australians are by far the fastest growing ethnic group. They recently overtook Chinese-born Australians and New Zealand-born Australians and are on track to take over the number of Australians born in the United Kingdom to become Australia’s largest group of first generation migrants. Already the Indian diaspora has blossomed into an extraordinary community, numbering more than one million Australians – nearly one in 25 Australians has Indian heritage.

Putting these two facts together – India’s global rise and the growth in Indian migration – leads to an inescapable conclusion: India will change Australia inside and out.

This story is told in my book, Australia’s Pivot to India, being published in October by Black Inc Press. As India is on the cusp of becoming a global superpower, and Indian-Australians head towards becoming Australia’s largest migrant group, the purpose of this book is to analyse Australia’s modern relationship with India in the period since its independence. This book isn’t a hagiography of the bilateral relationship, and it isn’t a starry-eyed attempt at painting a rosy picture of the future.

The book looks at three questions:

• What was the relationship with India so weak for so long?
• What role can we expect India to play in Australia’s future?
• How can Australia ensure that we support the Indian diaspora in Australia as the latest wave of migration?

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The first of these questions has been the source of much debate in the foreign affairs community. It seemed so paradoxical that Australia and India – who shared so many bonds of history, language, democracy and geography – should have such a weak relationship for so much of our diplomatic history.

Indeed, relations had gotten off to a good start early on. Australia had been the first country in the world with which India established a full diplomatic relationship in 1944, before it had even established its sovereignty. When India finally gained independence in 1947, Australia’s responded warmly because, as Australia’s Foreign Minister Herbert Vere Evatt noted, “Our geographical proximity and our common interest in the affairs of the Indian Ocean and South-East Asia naturally throw our lots closely together.”

In the ensuing eight decades, the desirability of a warm friendship with India has been affirmed and reaffirmed by every Prime Minister of Australia from Chifley to Albanese. Motivated by strategic logic, and fuelled with cultural enthusiasm, successive Australian governments have sought to build a deep relationship with India.

Yet, in the words of Ian Hall, one of Australia’s foremost India analysts, these attempts have been “fitful [but] they have not always borne fruit”. Indeed, for nearly six decades, bilateral relations were characterised by misperception, lack of trust, neglect, missed opportunities and even hostility.

In the 1950s, the relationship had sunk so low that Paul Hasluck, who later served as Minister for External Affairs, described Australia’s relations with India as worse than those with any other country including Russia. In the 1960s, we clashed over apartheid in South Africa and the war in Vietnam. In the 1970s, Prime Minister Gough Whitlam felt compelled to admit that there was “something missing in … the relationship” and the Department of Foreign Affairs concurred that India’s importance to Australia was recognised “perhaps more in the breach than the observance”. In the 1980s, Australian diplomats described a “sense of drift” in Australia’s relationship with India. And a Senate report in the 1990s concluded that the two countries were “unusually distant in their relations.”

For many decades, our bilateral diplomacy was rife with opportunities squandered and potential unrealised. Too often the relationship seems to have comprised, what former diplomat Mark Pierce, calls a series of “false dawns and first dates”.

The important question is why? By diagnosing the reasons for these failures, we can hope to lock in recent bilateral progress and build a plan to grow the relationship into the future.

There is no shortage of introspection on this question within Australia’s foreign policy establishment. Much has been written on the historic failures of the Australia-India relationship by eminent academics and researchers. In the book, I canvass four explanations for Australia’s historically weak relationship with India.

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The first possible explanation is that the bilateral relationship was held back by failures of leadership, including inconsistent political attention and limited bureaucratic follow through.

It’s true that leadership plays an important role in bilateral relations. It is difficult to disagree with Meg Gurry’s assessment that we can “trace the origins of today’s lacklustre [bilateral relationship] to [Menzies’] lack of interest in India.” Menzies and Nehru failed to establish a strong bilateral relationship during this important postwar era and early days of India’s independence. The two men had contrasting ideologies and styles and recognized few points of common national interest. As a consequence, Australia and India remained culturally, strategically and diplomatically distant.

Not all the blame can be laid at Menzies’ feet.  In June 1973, Whitlam became the first Prime Minister to visit India since 1959. During the trip, Whitlam was at pains to redress the historic weakness of the bilateral relationship. Whitlam declared, “Our relations with India have not been given the attention they should have. If this has been so, I intend to amend it and amend it thoroughly.” But in Whitlam’s case, and not for the last time in the relationship, Prime Ministerial rhetoric was not backed up by substance.

Over the next 25 years – including the premierships of Whitlam, Fraser, Hawke, Keating and Howard, India’s relationship seemed stuck in a holding pattern. There was progress, there were steps forward, there were setbacks, but the elements of substance that matter in bilateral relationships were missing. Of this period, the great Allan Gyngell once quipped, “Every Australian government discovers India once, and then promptly forgets about it.”

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The second explanation for Australia’s historically weak ties with India is that the relationship was constantly chipped away at by bilateral frictions which undid the goodwill generated by political exigencies.

These various frictions over the decades created a “stop start” dynamic in the bilateral relationship. These bilateral issues generally focussed on two themes: race and security. On race, the White Australia policy cast a long shadow of the relationship. The Haneef case and the violence against international students further inflamed racial issues. On security, Australia clashed with India over nuclear weapons and India’s ties with the Soviet Union.

But, while these frictions undoubtedly set the relationship back, I argue in the book that their ability to distract and derail the relationship is evidence of a deeper weakness.

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Former Foreign Minister Gareth Evans used to refer to a concept “ballast” in bilateral relationships needed to maintain bilateral communications and continuity when policy agreement broke down – or as he put it, “when squalls blow up”.

While lack of leadership and bilateral frictions contributed to Australia’s weak relationship with India, the primary problem was a lack of “ballast” – a hollowness at the core of the economic and strategic relationship. Australia and India lacked fundamental common economic interests for most of our history. In fact, as Australia forged a roaring commercial relationship with many East Asian neighbours, our trade and investment with India languished. In 1990, an Australian newspaper lamented that “nothing has succeeded in prising open the door to the Indian economy”. Despite decades of attempts, our economic relationship seemed to be perennially in first gear.

This seemed like a puzzle: Why, among all our Asian neighbours would Australia not be close with the one we have the most democratic parallels and historical connections? Counter-intuitively, it was precisely these similarities keeping us apart. India’s colonial history and democratic institutions forced it into an economic development model with minimal complementarities to Australia’s economy.

India’s economy is a product, in part, of the development strategy it chose. Unlike other Asian countries, India chose an “import substitution” development strategy that focussed on self reliance and poverty reduction rather than trade and investment. This created an economy, which unlike the “export growth” models in East Asian countries, was much less complementary to Australia.

East Asian governments were stronger, their business lobbies relatively weaker and civil society more compliant. These countries – like Japan, Korea, China, Malaysia and Vietnam – used powerful central government direction to divert national resources into domestic infrastructure, competitive national industries and strong export sectors. Consequently these “Asian Tiger” economies were importing Australian minerals by the boatload to fuel their construction and investment booms. And Australia was importing billions of dollars of manufactured goods from them in return.

India couldn’t follow this path. The central government was, for most of the twentieth century, too weak to resist the protectionist pull of business. Civil society was too strong to allow national resources to be diverted from poverty reduction into national industrial competitiveness.

So, while India’s strong democratic traditions created some political synergy with Australia, they forced India into an economic model that pushed us apart. After decades of protectionism and import substitution, Australia had a remarkably weak trade and investment relationship with India.

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If the lack of a substantial economic relationship impacted our relationship, so too did the lack of strategic alignment.

We live in the “first empire-free millennium” in history, but the legacy of bygone empires still powerfully shapes our times. Australia and India, both former British dominions, had different colonial experiences that shaped their respective paths to independence and cast a long shadow over their national journeys.

Australia and India’s distinct colonial experiences have had profound effects on their approach to international affairs. The two countries entered the post-war world with remarkably different world views and they saw geopolitics through divergent lenses.

India’s experience left it with a profound fear of ever again being dominated by another country. This anxiety drove India’s distrust of global superpowers and its determination to pursue its interests without joining either of the two cold-war blocs.

Australia’s imperial history left it with a fundamentally different lesson of statecraft. Membership of the British Empire provided Australia with security and prosperity in the first century of European settlement. And our alliance with the United States continues to underpin our security today. As a smaller nation, our safe place has often been nestled into the bosom of a larger power which guarantees our security.

If Australia’s motivating foreign policy anxiety is “fear of abandonment”, India’s is “fear of subjugation”. These different perspectives, shaped by different colonial experiences, caused Australia and India to move in different geopolitical directions.

India’s centuries of oppression left it suspicious of superpowers and preferring non-hegemonic multilateralism, while Australia’s more benign relationship with its colonial ruler made it more comfortable with great power geopolitics.

India eschewed alliances in favour of non-alignment while Australia engaged in frantic entryism, joining every available pact from ANZUS to SEATO. While India tried to avoid foreign military entanglements, Australia committed forces to a wide range of regional conflicts including Malaya in 1950 and 1955, Korea in 1950 and Vietnam in 1965.

For decades, the two countries operated in separate strategic spheres and their interactions were characterized by either indifference or discord.

Of course, these explanations are not mutually exclusive. These and other factors may have all played a part in shaping the relationship for better or worse. But my bias is towards the more fundamental factors. I believe that, for a long time, the relationship lacked a “central core”: we just didn’t have the essential economic interests and strategic alignment that forms the ballast for a deep and resilient relationship.

When he visited Delhi in 1989, John Button observed “an unbridgeable gulf of time, distance and culture” between Australia and India. The Industry minister felt a cool indifference in the senior Indian politicians and bureaucrats he met. He returned to Australia deflated, feeling that “Australia was too far away, too small, and quite irrelevant to [India’s] daily preoccupations”. Button’s sentiment more or less summarises the preceding four decades of unfulfilled promises and unrealised aspirations in Indo-Australian relations.

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But slowly, over the next few years, the tide of history began to draw Australia and India together. Three events unfolding over the course of the 1990s would radically change bilateral relations.

The first event was the end of the Cold War and the dissolution of the USSR, which caused many countries to re-think their foreign policy.

India’s economic liberalisation was another crucial development in the 1990s that opened the door for stronger bilateral relations. India’s liberalization unleashed its economy, grew its middle class and enabled much stronger business engagement with Australia.

The changing pattern of Australia’s migration was the third catalyst in the 1990s for deeper bilateral ties. Indian migration to Australia grew significantly as a result of changes in migration policy to focus on skilled workers, growing mobility among India’s middle class and rising educational opportunities.

None of these developments – the end of the Cold War, India’s economic reforms, and the gathering pace of Indian migration to Australia – created breakthrough moments for the relationship. But over time they profoundly changed the bilateral context, like a gradual blossoming of flowers, and bearing of fruit, from seeds planted many years earlier.

For many decades, Indian and Australian diplomats summarised the strengths of our relationship in terms of the “Three C’s” of cricket, curry and the Commonwealth. This overused cliche betrayed a shallow relationship. The “Three C’s” gave a semblance of familiarity, but were a poor substitute for genuine connections in trade, investment, culture, security and diplomacy. As Australia’s bond with India improved and developed more substance, Australian diplomats began to describe the emerging dimensions of cooperation as the “Four D’s” of democracy, defence, dosti (friendship) and the diaspora.

The cricketing relationship between Australia and India is emblematic of our changing relationship. Both countries have a rich cricketing history, and matches have generated immense interest and excitement among fans. The rivalry has helped bring the people of India and Australia closer together, fostering camaraderie and respect between the two nations, both on and off the field.

In recent years, the nature of our cricket relationship has evolved. Cricket used to be a sport that Australia played “against” India. Australian cricketers would travel for test series across the world, where the pitches were slow and soft, the food was risky, and the weather was hot.

Today more than a dozen of Australia’s best male and female professional cricketers play alongside Indian players in the Indian Premier League (IPL) which has been instrumental in bringing cricketers from both countries together. Many Australian coaches, and support staff have also participated in the IPL, creating friendships and collaborations that extend beyond the cricket field.

Australians with Indian heritage have made a massive contribution to Australian cricket. Many Indian migrants have a great passion for the sport. Cricket Australia data reveals that the most common surname of all registered cricket players in all Australian is Singh. The second-most common surname is Smith; third is Patel, fourth is Jones and fifth is Brown.

In cricket, as in so many other aspects of our bilateral relationship some of our historic relationships have been changed by people to people links.

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Shortly after his appointment as Australia’s High Commissioner to India in 1965, Arthur Tange sent a slightly agitated note to Foreign Minister Paul Hasluck. Arriving to find a listless diplomatic relationship, Tange wrote to his boss that while there was fertile ground between the two countries, “no one seems to know what seed to plant”.

This quote was given to me shortly after I became the chair of the Parliamentary Friends of India by my colleague Tim Watts, one of the great authorities on the Australia India relationship in the Australian parliament. “Andrew,” Tim said to me emphatically, “we finally know, after more than 50 years, what seeds to plant in that fertile ground: the diaspora!”

Australia is home to more than one million people with Indian heritage – nearly 1 in every 25 Australians.

Today Indian Australians are the fastest growing of all the nation’s main ethnic groups. The number of people in Australia who were born in India has increased seven-fold in the last two decades. Nearly a quarter of the 1 million people who arrived in Australia from other parts of the world between 2016 and 2021 were from India.

As I said earlier, on current projections, Indian-born Australians will soon become the largest migrant group. Indian-born Australians are growing ten times faster than the number of British-born Australians and five-times faster than the number of Chinese-born Australians. In the five years between the 2021 and 2016 census, there were more than 200,000 additional Indian-born Australians compared with just 20,000 additional British-born Australians and 40,000 Chinese-born Australians.

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Indian migrants to Australia are fabulously well qualified. Indian born residents have much higher levels of educational attainment than all usual residents of Australia, with 64 per cent of Indian born having a Bachelor’s degree or higher compared to 26 per cent of all Australian residents. That means Indian-born Australians are more than twice as likely to have a university degree. Almost 30 per cent of Indian born residents aged over 15 had a Master’s degree or higher.  Unfortunately, this high level of qualifications isn’t fully captured by the Australian labour market. The stereotype of Indian engineers diving Ubers is not without some foundation.

Indian-born people with a degree are much more likely to be working in low skilled occupations than Australian-born people with degrees. For example, more than half (50.7%) of Indian-born people working as labourers have a tertiary degree. By comparison only 4.2 per cent of Australian born people working as labourers have a degree. Similarly, 46.9 per cent of Indians working as Machinery operators and drivers have a degree compared to 3.4 per cent of Australian-born people working in the same field.

Indian diaspora leaders are playing an increasing role in Australian business. Tarun Gupta, the CEO of Stockland, is one of many Indian Australians in senior leadership roles of top listed companies, including Orica CEO Sanjeev Gandhi, Link CEO Vivek Bhatia, Pact CEO Sanjay Dayal and former Newcrest boss Sandeep Biswas.

Their success mirrors the worldwide trend of major corporations now run by members of the global Indian diaspora, including Google’s Sundar Pichai, the former PepsiCo CEO Indra Nooyi, Microsoft’s Satya Nadella, former Mastercard chairman Ajay Banga (now head of the World Bank), former CEO of Citigroup Vikram Pandit, among more than 50 Fortune 500 companies currently run by CEOs of Indian descent.

Indian Australians are having an increasing influence on politics. Lisa Singh, a Senator from Tasmania, was the sole member of the Australian parliament with Indian heritage when she was elected in 2011. In that same year, only one person with Indian heritage was serving across all the Australian state legislatures. There was not a single mayor of Indian descent in any local government in the country. Despite being one of the largest immigrant groups in the country, Australians of Indian descent were barely represented in politics.

The NSW state election in 2023 was a high watermark for Australians of Indian descent. Charishma Kaliyanda, who migrated to Australia from India as a four-year-old, won the seat of Liverpool for Labor and Gurmesh Singh, a fourth generation migrant of Sikh Punjabi descent, retained his seat of Coffs Harbour for the Nationals. But what made the election special for Indian Australians was the diversity at the top of the winning ticket. The new Deputy Premier, Prue Car, has Indian heritage through her father who hails from Durgapur in West Bengal. The incoming Treasurer, Daniel Mookhey, whose parents were Punjabi migrants, made history as the first minister to be sworn in on the Bhagavad Gita. “The deputy Premier and the Treasurer both having Indian heritage in this government, is just such a sign of how as a parliament we are looking like the people we represent,”, Mookhey said after the win. “I don’t think we deserve massive pats on the back for this as politicians, because frankly we should have been achieving this already, but I do think we should mark the fact that progress has been made and there’s more progress to be done.”

The growing size of the Indian diaspora in Australia has made them a significant target for politicians from all sides of politics. Former Prime Minister Scott Morrison, for example, garnered attention for regularly posting Instagram selfies of himself cooking Indian curries and homemade “ScoMosas”.

Concrete evidence on the voting patterns of Indian-Australians is limited. One survey by the Carnegie Endowment in 2022 found that 43 per cent of Indian Australians identified with the Labor Party, 26 per cent of respondents identified with the Coalition and 15 per cent identified with the Greens, while 5 per cent selected the One Nation Party.

The Indian disaspora is having an increasing cultural impact on Australia. Bollywood films and Indian music have gained immense popularity, with many theatres screening Bollywood movies and hosting Indian film festivals. The Australian Indian Film Festival showcases Indian cinema in Australia each year, providing a platform for Indian filmmakers to share their work with Australian audiences. Indian-Australian authors like Roanna Gonsalves, Aravind Adiga, and Suneeta Peres da Costa have made notable contributions to Australian literature Literary festivals, such as the Sydney Writers’ Festival and Melbourne Writers Festival, often feature Indian and Indian-Australian writers, providing a platform for cultural exchange and dialogue.

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Australia’s pivot to India is an opportunity to strengthen our nation by adding another chapter to our multicultural story and forging an alliance with the emerging superpower in our region. If we are successful, it will help deliver harmony at home and security in the world. This opportunity has only recently drifted within reach. Despite many similarities of geography and history, the distance between Australia and India seemed unbridgeable for many decades.

I argue that our colonial experiences left us with fundamentally incongruent outlooks on the world. Economically, Australia became a trading nation, while India focused on self-reliance. Strategically, India’s preference for non-alignment was diametrically opposed to Australia’s enthusiasm for alliances. These orthogonal approaches prevented us from creating a relationship of substance in the second half of the twentieth century. They created a lacuna at the core of our relationship that no amount of diplomatic effort could fill.

But where to from here?

As the Indian proverb reads, “Nobody is born friend or born enemy, only circumstances bind you.” Changing circumstances in the 1990s – including the fall of the USSR, India’s economic reforms and the changing pattern of Australia’s migration – allowed that lacuna to be slowly filled. Over the next two decades, these events allowed Australia and India to drift together. As the Cold War ended, India began to look east. As our regional security environment began to change, Australia began to look west. As India’s economy leapt ahead, our bilateral trade grew. As Indian migrants and students arrived in Australia, our people-to-people links flourished. As our interests gradually came into alignment, our relationship came into focus.

The current strength of the diplomatic relationship owes much to the efforts of our Foreign Minister, Penny Wong, our Defence Minister Richard Marles and the Prime Minister – all of whom have prioritised the bilateral relationship. The diplomatic intensity also reflects the substantial role that each country hopes the other will play in its future. But neither nation is entirely clear about exactly what part it is willing to play, or what it expects of the other. Australia hopes that India will help promote regional security and allow us to participate in its extraordinary economic growth.

India hopes Australia will continue to substantially and symbolically support its recognition as a first-rank global power.

Whether or not we are able to fulfil each other’s aspirations depends on how our relationship develops in the future. As with any friendship, its real strength is only tested in challenging times. Australia should not mistake expressions of friendship for an alliance that implies any formal or exclusive obligation. Nearly two thousand years ago, a Tamil poet wrote, “Yaadhum Oore, Yaavarum Kelir”, which means, “To us, all towns are one, all men our kin”. This theme runs through Indian grand strategy, going back to the ancient Sanskrit treatise on statecraft, the Arthashastra, which exhorts rulers to work together with all parties rather than singling them out. This refusal to pick a side is the common thread that links Nehru’s post-independence stance of non-alignment with Modi’s modern dictum of multi-alignment.

India’s statecraft, in all its guises, has always sought to keep options open. Yes, India is a part of the Western Quad, but it’s also in the Beijing-led Shanghai Cooperation Organisation. It routinely attends trilateral meetings with both China and Russia. It participates in the BRICS forums, comprising Brazil, Russia, India, China and South Africa. Subrahmanyam Jaishankar, India’s external affairs minister, makes clear in his book on the subject that the core objective of his foreign policy is to “give India maximum options in its relations with the outside world”.

Australia’s pivot to India should aspire to build a distinctive relationship that goes beyond transactional engagement and circumstantial alignment. It requires us to take a warm friendship produced by favourable circumstances and turn it into a genuine partnership. The essence of that partnership is to deepen the relationship with mutual investment in common endeavours across every sphere of our interactions.