While many commentators have been focusing on the rise of China, not enough attention has been paid to the rise of India. India’s rising strategic, economic, political and cultural influence means it will be a key player in shaping the world in the 21st C

Date:  08 August 2008

As the world sees the potential of an Asian/Pacific century unfold, Australia sees India at the heart of this historic shift in political and economic influence. And what gives Australia a feeling of optimism is that we can do more than just witness this economic transformation.

We are already part of the process.

Our future is linked to that of India and our other Asian neighbours. Our economic growth is powered by their growth.

Last year, the Indian economy exceeded US$1 trillion. For the last several years, it has been growing at 8-9 per cent annually. By 2025, India may be the world’s third-largest economy.

Trade with India has grown faster than any of our other top markets over the past five years. India has become our 10th largest trading partner. In 2007, two-way trade in goods was nearly $11 billion.

Our trade has been anchored in minerals resources. Products like gold, coal, copper and diamonds will continue to dominate our exports for a period. But slowly and steadily, services like information and communications technology, education, tourism, finance and construction are becoming much more prominent. India is now the seventh-largest market for Australian services.

Indian and Australian investors are also beginning to seize opportunities in our respective markets. Australian investment in India was worth over $2 billion in 2006, including in manufacturing, telecommunications and minerals processing.

Indian companies are now investing in Australia, building on our skills in information technology, agribusiness and resources.

Last year Australia and India decided to undertake a joint feasibility study into a bilateral Free Trade Agreement (FTA). Simon Crean and Indian Commerce and Industry Minister Kamal Nath, agreed in May to complete the FTA study by the end of 2008.

We are determined to seize upon an historic opportunity to take our relationship with India to a new economic and strategic level.

There is more than economic complementarity between our two countries.

There are ties of language and parliamentary democracy and respect for the rule of law, the law of contract and intellectual property.

There are profound values and interests we have in common.

There is much that Australia and India share, both in the region and globally.

India today is the world’s largest parliamentary democracy, assuming the mantle of global influence to which its economic size and strength, and its strategic weight and history entitle it.

India is now rightly making its voice heard in the corridors of regional and international fora.

We are both members of, and cooperate closely in, the ASEAN Regional Forum and the East Asia Summit.

We have sought observer status to the South Asian regional body, the South Asian Association for Regional Cooperation (SAARC).

India’s expanding diplomatic role in Asia, which reflects the skilful ‘Look East’ policy launched by former Prime Minister Narasimha Rao in the early 1990s, offers much scope for regional cooperation between India and Australia.

Our cooperation is not just regional, it’s multilateral. Like Australia, India has been a major contributor to the peacekeeping operations of the United Nations.

We have worked together in East Timor, where India has deployed police officers. We both support the UN’s current peacekeeping efforts in Sudan.

India has a vital contribution to make as a serious and positive force in Asia’s future.

Australia strongly believes that India, with its firm commitment to multilateralism, should have a permanent seat on a reformed United Nations Security Council. That world body must properly reflect the modern world.

We share with India important goals, such as our commitment to combat terrorism and to tackle the adverse consequences of climate change, a global debate in which India will play an important role.

Australia is ideally placed to work with India as it addresses two of its most critical strategic concerns, energy and food security. We also have shared interests in a stable, prosperous region, with a focus on maritime security and counter-terrorism.

Australia and India are both committed to addressing the critical challenge of nuclear non-proliferation and disarmament.

India shares our ultimate objective of nuclear disarmament and has a strong record on non-proliferation.

Indian participation in the International Commission on Nuclear Non-Proliferation and Disarmament would of course be of great assistance.

Australia is developing a mature and broad-ranging relationship with India, one that can and does accommodate differences of opinion on particular issues, and one that still moves forward constructively and positively.

In parallel with the growth in trade and investment, we can see another quiet but powerful trend developing.

The fabric of our relations are being increasingly interwoven by enhanced people-to-people exchanges in educational, scientific, cultural and sporting areas.

This is greatly benefiting our society and our economy.

We will continue to do all we can to strengthen ties between Australian and Indian educational institutions. The social networks between our two countries offer enormous potential for developing commercial and other relations.

By The Hon Stephen Smith MP, Minister for Foreign Affairs