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India to complicate Asian game

Australia's Asian strategy is often characterised as a choice between China and US, but an emerging India is complicating that picture.

Rory Medcalf

Narendra Modi in cockpit of MiG-29K abroad INS Vikramaditya

While Australian attention is fixed inward on the budget, another story that might profoundly affect our long-term strategic future is being written elsewhere. On Thursday Indian Prime Minister Narendra Modi begins a historic visit to China that could mark a step-change in relations between the crucial rising powers of the Indo-Pacific.

A popular theme in Australian foreign policy debate is that choices are looming between our alliance with the United States and our vast trading relationship with China. But Australia's regional order is becoming many-sided, with at a minimum India and Japan emerging as consequential players alongside China and the US.

The economic, diplomatic and military interactions between China and India could have powerful importance for third countries such as Australia. The revitalisation of India's bumpy economic rise and New Delhi's eastward pivot are raising the bar for how China engages with others.

Although Modi's internal economic and governance reforms have moved more slowly than many had hoped, he has galvanised India on the international stage.

Modi has cemented economic and security ties with Japan and embraced a strategic partnership with the US, symbolised when Barack Obama was the first US President feted at India's Republic Day parade.

Washington has identified India as a valued friend in balancing Chinese power and securing the Indian Ocean, and is sharing defence technology to this end.

India is deepening its links with southeast Asian states such as Indonesia and Vietnam, pursuing self-interest even while retaining some talk of non-alignment It is declaring its expanding interests as a maritime power, voicing concern over freedom of navigation in the South China Sea, and trying to counter China by building informal security ties among the island states of the Indian Ocean.

After decades of relative indifference, Australia is a country India is cultivating for security, economic and developmental benefit This was signalled by Modi's visit last year, his rousing reception here by a large and growing Indian community, and his and Tony Abbott's instruction to officials to finalise a free-trade agreement within a year. The Indian and Australian navies are to begin annual exercises together, and intelligence and counter-terrorism co-operation is improving amid shared interests.

India remains a smaller economic partner for Australian than China but the potential for growth is massive - and not only trade but also investment and innovation. Through coal, potentially natural gas, nuclear and renewables, Australia could become a critical contributor to India's energy security.

Much will depend on how long Modi's India can sustain its new pace of growing faster than China, and whether he uses his mandate to follow through on reforms to make more of India as investor-friendly as he has made his home state of Gujarat.

Fifty-three years since it was the site of a bitter war, the long Himalayan border between the two Asian mega-states remains disputed. Polling suggests that a large majority of Indian public opinion considers China a security threat China's continuing military assistance to Pakistan remains one reason for this.

Another is Beijing's increased naval presence in what India considers it maritime backyard. A brazen submarine visit to Sri Lanka, plus army incursions on the contested mountain border, were more than enough to spoil Chinese President Xi Jinping's prospects of reaching a fresh start with India when he travelled there to meet Modi last year.

Perhaps an India increasingly secure in the knowledge of its closening ties with the US, Japan, Australia and others, is better poised to manage its interests with a strong China. That, and the fact that India's military modernisation programs, including nuclear weapons made to deter China, proceed apace.

But whatever the hopes or limitations around this week's summitry between Modi and Xi, Indians and Chinese should not be the only ones watching - this will matter to the future security and wellbeing of Australians too.

Professor Rory Medcalf is Head of the National Security College. This article first appeared in the Australian Financial Review on 13 May 2015 and is republished here with permission. Image: Indian Navy. Licensed under CC BY 2.5 in via Wikimedia Commons


Updated:  2 June 2015/ Responsible Officer:  Head of College, National Security College/ Page Contact:  Web administrator, National Security College