As China’s once-endless growth shows signs of fatigue, other nations are increasingly looking to India for trade and strategic opportunities, not least Australia.
With a relatively young population about to surpass China’s as the world’s largest, India offers not just an incalculably vast domestic market for energy, foodstuffs and other commodities but an educated workforce attractive to foreign manufacturers. Its geographic importance, meanwhile, at the crossroads of Asia, is only growing as a potential counterpoint to Chinese influence in the region.
Crowds in Mumbai, India, where half the population is under the age of 30. India is set to be the world’s fastest-growing major economy in coming years.Credit:AP
Hence the enthusiasm this week around Prime Minister Anthony Albanese’s visit to the subcontinent, the first by an Australian leader in seven years. It is hoped the visit will result in stronger ties between the two countries, both economic and strategic.
“Everyone knows that better India-Australia trade is a massive opportunity, but for too long our economic relationship has been underdone,” said Jennifer Westacott, chief of the Business Council of Australia. “The prime minister’s decision to make this critical visit happen is hugely significant.”
Ahead of formal talks on Friday with his powerful Indian counterpart, Narendra Modi, Albanese announced Australia would open the door to more Indian students, with a new agreement to make it easier for them to have their qualifications recognised in both countries. He also signalled Australia would work to encourage more co-operation between our respective film industries. “Bringing our two countries’ storytellers together – actors, producers and filmmakers – will in turn bring our people closer together,” he told a tourism event on Thursday.
For their part, David Crowe reports, Australian officials are hoping for a commitment from Modi to expand our trade deal for Australian exports, which include coal, lamb, wool, lobsters and rare earths.
In the meantime, Albanese has enjoyed a display of “soft power” the likes of which only India can turn on: covered in flower petals at a holy festival, cheered by crowds at a cricket match, the first foreign leader to tour a particular flagship aircraft carrier and charmed by Bollywood stars in Mumbai. In return, he has waxed lyrical about travelling India as a backpacker in his youth and lavished praise on his hosts at every opportunity, calling his visit one of the “honours of my life” and praising the “magnificent nation of India”. It already, then, shows every sign of being a diplomatically productive visit, for both sides.
The trap for Australia would be to simply pigeonhole India as an ascendant version of China, even if the comparison is compelling. As China’s population growth slows – to the extent it is now encouraging families to have more children, an incredible policy turnaround – it will inevitably begin to drag on growth. Inflation in China recently charted at just 1 per cent year-on-year, a sign its economy has yet to fully emerge from its pandemic blues, if it ever entirely will. India, in contrast, has a much more youthful population, with enormous potential for growth, both as a vast consumer market for exports and a workshop for global manufacturers.
Yet successfully tapping into the Indian economy will require a different mindset to cracking the China model. It has a deep-seated history of protectionism that is yet to be entirely unwound. Basic infrastructure – roads, railways, electricity, water, internet – is improving apace but can remain a hurdle, especially to new investors. And as Albanese the backpacker no doubt experienced all those years ago, the way things work in India can for all sorts of reasons be bewilderingly complex, not least dealing with local bureaucracy, navigating social and religious sensitivities and, at times, an unorthodox relationship between government and the nation’s biggest businesses.
Indeed, Modi’s longstanding ties with billionaire industrialist Gautam Adani in particular have come under close scrutiny following the recent attack on the Adani group by New York-based short-seller Hindenburg Research. Its allegations of accounting fraud and stock manipulation, while denied and rebutted by the coal-mining conglomerate, have raised questions about the effectiveness of India’s corporate governance and reinforced claims that the Adani group has unfairly benefited from government support.
There are also growing concerns about the Indian government’s less than democratic response towards those it deems critical of the administration, particularly the media. According to The New York Times, “self-censorship has spread, along with a shrill Hindu nationalism in news reports that echoes the government line”. In January, the government went so far as to invoke emergency laws to stop the dissemination of a BBC documentary about the slaughter of more than 1000 people, mostly Muslims, in 2002 in the state of Gujarat, where Modi was chief minister at the time.
The government crudely attempted to block the documentary on social media and a university even shut off the electricity to stop a screening by students, who watched it anyway on their phones. The Financial Times called the episode, which included a subsequent tax office raid on BBC offices in New Delhi and Mumbai, “disheartening” and suggested, “Stifling the flow of ideas and the media’s ability to hold wrongdoing to account will do no favours to the Modi circle’s hopes of turning India into an economic superpower.” So there’s that.
Some of Albanese’s goals, like his whistle-stop tour, will be relatively easy to accommodate. India wants to educate more of its students; Australia wants to educate them, for a price. Deakin University, encouragingly, is opening a campus in Gujarat, the first Australian university to open a branch of this kind in India.
Other investments will, clearly, prove more complex endeavours. So, too, our tentative moves towards stronger strategic ties in the shadow of Chinese disapproval. Yet these are relatively early days; India and Australia have much to offer the other. Albanese’s efforts are a welcome step in the right direction.
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