Diplomatist Magazine Diplomatist March 2019

Q SPECIAL REPORT Your report titled “An Economic Strategy for India to 2035: Navigating from Potential to Delivery” aims to put substance into a growing strategic relationship between Australia and India. What is the main analytical conclusion of this report? Our strategic interests are converging. We are both grappling with how to manage the decline of US strategic predominance and China’s more clearly articulated objective of becoming the predominant power in the Indo Paciﬁ c. Australia and India also share a commitment to a rule- based international system and we both want to see stronger institutions in the Indo Paciﬁ c such as the East Asian Summit. All these factors point to a stronger strategic partnership: not an alliance relationship because India is not interested in alliances, but the prospect of working more closely together including in groups like the so-called “Quad” (US, Japan, India, and Australia) The very concept of the Indo-Paciﬁ c reﬂ ects recognition that India will play a larger role in the strategic aﬀ airs of the region. It returns India to the strategic matrix of Asia. It also underlines the importance of the maritime theatre to the future strategic challenges of the region. Q With the US pulling out of Trans-Pacifi c Partnership, how much of a lead role can Australia take in promoting multi-lateral and free trade within the Asia-Pacifi c? must resist the calls of protectionism. Our future prosperity depends on opening up trade and investment not closing our economies. Q Could Japan be considered as a viable partner for Australia while assuming leadership within the Asia- Pacifi c region? Australia has a close relationship with Japan. It has grown into a genuinely comprehensive strategic partnership. The same can be said of India and Japan. When I was Foreign Secretary we set up the trilateral Australia-Japan-India dialogue. That reﬂ ected the reality that our interests were converging. We should look to further strengthen this trilateral relationship because we are like- minded on many of the big challenges facing the broader region. Again we are not looking at an alliance of these three countries but certainly a deep strategic partnership. Q Australia and India have a strong and productive bilateral partnership. But the collaboration has fallen short of its potential. What factors could be responsible for this and what can be done to broaden and deepen the bilateral trade? There are many reasons why there is a gap between enthusiasm and substance in the economic relationship. Australian business has yet to focus closely on India. “We can always do better and the report sets out steps we can take to this end. Each of the ten sectors identifi ed in the report contains recommendations on how to make more progress.” Australia has been a leading advocate of multilateral trade, globally and regionally, for many years. We see it as serving our national interests. The US withdrawal from the TPP was most unfortunate. But Australia worked very closely with Japan and others to conclude the TPP 11 agreement and that was a big step forward. In terms of India and Australia, our focus now should be on concluding RCEP and then it may be possible to look at a broader FTA across the region. That is one reason why I have recommended that Australia take the lead in bringing India into APEC. The more India is integrated into the trade and investment patterns of the region the better. We all Perceptions of the Indian economy are dated and for too long India has been put in the “too hard” basket. The purpose of my report is to bring a more up to date picture of the Indian economy to the attention of the Australian business community. But more than that to give Australian business a sense of where to focus both in terms of sectors and states in India. There is a growing structural complementarity between our two economies and that is what will drive trade and investment in the future. The report identiﬁ es ten sectors where Australia has some competitive advantages in the Indian market. Education is listed as the ﬂ agship sector with resources, agribusiness, and tourism as lead sectors. The other six sectors are more Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 3 • March 2019, Noida • 15

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