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Australia to boost trade ties with India

By George Skaria in Canberra
March 02, 2006 13:50 IST
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It's a new economic and strategic relationship that Australia is looking forward to as Australian Prime Minister John Howard prepares for his visit to India next week.

That was the key message from Alexander Downer MP, minister for foreign affairs, Australia.

Speaking to Business Standard in Canberra, Downer, a key member of Howard's government, said, "I think the prime minister's visit will significantly improve our relationship with India. There are agreements on information technology, education and trade. We can either have these meetings and just go through the formalities, or we can meet to see that these agreements are really important to both the countries. I think we are slowly moving from the former towards the latter."

This renewed optimism comes in the backdrop of two recent developments in India.

One is the Budget, where rules regarding investment in mining have been liberalised. For Australian companies, which have large interests in the mining sector, this is seen as a big move forward.

Downer said, "We are keen to see liberalisation in mining. We can bring a lot of expertise and investment (into this sector)."

Downer pointed out that Japan's post-World War-II economic turnaround was driven with Australian mineral resources as was South Korea's. He believes that the same could be true for India as well.

The other development is the ongoing visit of US President George Bush to India. Australia sees a strong relationship emerging between India with the US.

Downer said, "It is good to see India and US coming closer. I know it is controversial in India. But my feeling is that it makes good strategic sense for India to have a good relationship with the US as India lives in a difficult part of the world. It has a very interesting neighbourhood."

But even as India's relationship thickens with Australia, China continues to be a very strong trading and investment partner of Australia. Australia would like to have a balanced relationship between the various powers in the South-east Asian region.

Downer said, "Economically, China has gone through its reform process faster than India. One important observation regarding India is that its political system is settled. Its political system is not expected to change ever. And that's good. China's political status, on the other hand, is not settled. It must go through an evolution. And this difference is the source of great strength for India. Strategically, we have very good relationship with China but it is important that the power structure in the Asia-Pacific region remains a balanced one with the involvement of the US in the region and the involvement of India in terms of the the overall balance of power."

It is in this backdrop that Australias and India's closer ties are to be seen. Australia is the twelfth-biggest economy in the world and India, with a billion people, is also liberalising fast. Both have good deal of common interests in the region.

But the road to this feel-good relationship between the two countries has not an easy one. In the fifties and the sixties, the then prime ministers of the two countries, Jawaharlal Nehru and Robert Menzies did not see eye to eye.

India was also one of the founders of the Non-align Movement and it was quite close to the Soviet Union. On the other hand, Australia was one of the stalwarts of the Western alliance. Further, since 1998, when India had the nuclear tests, relationship between the two countries had soured.

In fact, even today, the nuclear issue remains a contentious area for Australia. "Australia has forty per cent of the world's exploitable, economically viable uranium. Our policy is that we export uranium only to those who sign the nuclear non-proliferation treaty. So, unless India does that, we will not be exporting uranium to it," Downer said.

These issues notwithstanding, over the last few years, huge positives have been built around the relationship between the two countries. It is on this ground that Australia is looking forward to a growing and resurgent relationship with India.

The writer is in Canberra at the hospitality of the government of Australia.

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George Skaria in Canberra
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