Speeches Index

"INDIA'S CHANGING REGIONAL AND GLOBAL OUTLOOK - AND EMERGING OPPORTUNITIES FOR AUSTRALIA AS A RESULT OF SHIFTING POLICIES"

H.E. MS PENNY WENSLEY AO
AUSTRALIAN HIGH COMMISSIONER TO INDIA

Introduction
Good afternoon, Ladies and Gentlemen

Thank you Dick, for that warm introduction and thank you to the Asia Society, the AIBC and DFAT Sydney office for arranging this function.

I appreciate the effort involved, not only in organising it but in attracting such a large and diverse crowd. I am pleased there is such interest in India and in Australia-India relations.
I note particularly - and welcome the presence of a number of senior diplomatic colleagues: the Ambassador of the Philippines, the Consul-General of Korea, the Indonesian and New Zealand Consuls-General as well as of course, the Indian Consul-General and representative of several Indian organisations and enterprises including the Indian press.

Like my kind colleague, John McCarthy, who addressed the forum in April, I feel somewhat awkward about telling people about their own country, but hope they and you will find value in my impressions and observations after some twenty months in India - i.e. just past the mid-point of my posting.

On these mid-term consultations, I have addressed audiences in Perth, Melbourne, Hobart and Canberra (and still have Brisbane to address). The focus has been on Australia-India relations in business and doing business in India, but for this audience I wanted to approach the subject in a different way.

Australia and India do not know enough about the contemporary reality of each other - we telescope in on particular issues from time to time, but the larger picture is not in focus. It is blurred by outdated impressions, simplistic stereotypes and assumptions.

Neither country fully appreciates the changes taking place, the sophistication of certain developments/sectors, the capabilities and strengths of each other and the significant complementarities and opportunities that result from these changes.

There is a strong need to raise awareness change perceptions stimulate more interest in each other to update our ideas to achieve a modern, mature, more sophisticated relationship.

I don't want to sell our relations short - actually, they have never been in better shape: we are on a growth trajectory in all areas, but; if its real promise is to be realised and fulfilled, we should, I believe, be taking a more comprehensive, strategic approach viewing India and placing the relationship in a wider context.

Changes - and continuity - in Australia's foreign and economic policy orientation in the dynamic past few decades are well known to us. The changes in the international environment - the dominance of globalisation, the threat of terrorism - are also now commonly recognised.

Today I want to focus on the third part of the picture - the major changes that have taken place in India's foreign policy outlook in the past decade or so, and what these mean for Australia.

India's changing outlook. India’s diplomacy today is active in many directions - India is working to strengthen its relations with the United States, Europe, China, Southeast Asia, key states of the Asia-Pacific, Central Asia, the Middle East and Africa, and more.

Of course relations with Pakistan remain to the fore of Indian concerns. But more than ever before, India's international outlook faces many directions, and focuses on a very broad range of themes - from transnational security problems to multilateral trade arrangements, from the future of the United Nations to the nature of the global strategic framework, from mutually benefical relations with its smaller neighbours to new modes of partnership with global powers.

Official travel illustrates the story. This week, Prime Minister Vajpayee is on a historic visit to China, with three senior Ministers and a large business delegation, and he has returned recently from visits to Russia and Germany and meetings with other G8 leaders. A few weeks ago Deputy Prime Minister Advani was in the United States and the United Kingdom. Last month India's National Security Adviser Brajesh Mishra was in Tehran, Kabul, Washington, London, Paris, in the space of a week.

The traffic into New Delhi is just as busy. Last week the Indian capital was visited by the Foreign Minister of Russia and the Prime Minister of Laos, the latest in a series of senior ASEAN visitors. Every week India hosts high-ranking international visitors, whether heads of state or Ministers or senior officials; a pattern that has accelerated noticeably even in the two years I have been in New Delhi. These visits are much more than a parade. They are substantive. India is weaving a strong fabric of dialogues, agreements and understandings. For my colleagues in South Block - the Indian Ministry of External Affairs - these are exciting and demanding times.

I should acknowledge that not every voice in India entirely agrees on the desirability of the country's growing global engagement - hardly surprising in a country that has an exceptionally robust press with room for every shade of opinion. In some quarters there is debate about the merits of closer engagement with the United States or the global economy. In some corners there remain those who still seek spurious refuge in economic autarchy or political isolationism or ideological purity.

And even among the large body of Indian opinion that welcomes and favours the new Indian foreign policy outlook, there is not quite consensus about the precise origins of this historic shift.

Some attribute it primarily to the current Government, to the open-minded vision and calculations of its senior foreign policy decision-makers. Few would contest that the transformation is intrinsically related to the economic liberalisation that began in the early 1990s, as well as to the political adjustments compelled by the end of the Cold War. But some see the seeds of today’s Indian diplomacy in the effort of Rajiv Gandhi’s Government to modernise Indian’s international outlook in the 1980s. And a few even claim that Nehru's idea of non-alignment was always meant to balance idealism with pragmatism, so that today's Indian diplomacy is just a change of emphasis in a country which produced one of the world's earliest texts on statecraft, the Arthashastra, in the 4th century BC.

Fascinating as they are, these are domestic Indian debates. What matters most from Australia's perspective is that we recognise - and we welcome - the present reality. Indian foreign policy has changed.

The changes have been deliberate and conscious, even if they are in places incremental, or couched in language of continuity. The hallmarks of today's Indian international outlook include pragmatism and the placement of national interest – and not ideology - as the prime organising principle. In that sense, it is fair to say there is a natural resonance between India’s contemporary foreign policy and Australia’s, which bodes well for the deepening of our bilateral relationship.

Perhaps the key question in the minds of many observers of Indian foreign and economic policy is: are the changes irreversible? The answer from a range of important figures in New Delhi's foreign policy community - including National Security Adviser Mishra - is an unequivocal yes. There may be fluctuations, there may be changes in personal style or areas of focus, and even temporary setbacks or distractions, but fundamentally there is no going back. Little wonder that a recent book tracing India's new foreign policy by one of the country's most influential commentators, Raja Mohan who is shortly to visit Australia under our Special Visits Program, was titled "Crossing the Rubicon".

In all directions the most prominent reflection of India's changed foreign policy outlook is the transformation of its relations with the United States. This has become especially marked in the past three years. Not all observers would be as direct as India's then External Affairs Minister Jaswant Singh reportedly told journalists on the eve of the Clinton visit to India in 2000, when he described the previous fifty years of the relationship as "five wasted decades". But certainly there was a story of opportunity lost, of potential partnership between these two vast democracies being frozen by unlooked-for circumstance, especially the Cold War.

That much has changed beyond recognition. The Indian Prime Minister has spoken of the United States as a natural ally. Today these two countries enjoy close dialogue and political understanding on a broad range of issues; healthy and growing trade and investment links; exceptional people-to-people ties; and a growing relationship on strategic issues, including defence engagement such as joint exercises and even a cooperative naval escort arrangement in the Straits of Malacca.

While differences may persist in some areas, these are being addressed in an open and constructive way which ensures they do not overshadow the wider mutually beneficial relationship. And the unprecedented strength of the U.S.-India relationship has implications for their mutual understanding, cooperation or coincidence of interests on wider regional and global issues.

You may not read about it in the Australian newspapers, but I will mention two foreign policy stories that have made headlines regularly in India in recent weeks. Neither of these are stories we would expect to have seen a decade ago. The first is a U.S. request for India - with its impressive record of UN peacekeeping - to contribute to the international stabilisation force in Iraq, a possibility that the Indian Government is understood to be looking at very seriously. The second is the interchange of views among the United States, India and Pakistan on the recent and very welcome thaw in India-Pakistan relations. This is of course very much a bilateral process between India and Pakistan. But there is clearly a substantial level of confidence on India's part in engaging with the United States on questions of India-Pakistan relations and regional peace and stability.

Some Indian commentators like to suggest that improved relations with the United States were the catalyst for the momentum of many other countries in engaging with India in recent years. That is a simplistic argument, which misses that point that many countries have their own practical interests in closer relations with India, just as India has its own reasons for multi-faceted international engagement.
Time won't permit me too detailed a survey of all the relationships India is building. There is just too much to tell. The activity is in almost every direction.

So, for example, I am not downplaying the importance of the issue when I note only in passing the efforts to shape a strategic partnership from the longstanding bonds between India and Russia. Or the renewed focus of Indian diplomacy on its smaller immediate neighbours. Then there are India's growing links with the European Union. Or its engagement with the Islamic world - India after all has the world's second largest Muslim population. And its partnership with the new Afghanistan, where India is playing a significant role in reconstruction and development. Or a substantive and mutually beneficial relationship with Israel, which has grown rapidly in just 11 years of formal diplomatic relations. Or what some observers see as a recent renewal of interest in Africa which goes beyond such established contexts as UN, the Non-Aligned Movement or the Commonwealth. And India is exploring new modes of co-operation, fir example, the Foreign Ministers of India, Brazil and South Africa met last month in the first exchange in what is loosely being termed the G3. India, while growing its relations on a wide front, is promoting its traditional links and role with the developing world.

Speaking of these international bodies, India remains productively engaged in multilateralism, including in the United Nations, where it promotes its credentials as a possible candidate for a permanent seat on any reformed or updated Security Council.

I have had to resort to a list, but its sheer length reinforces the central point - that India's international outlook is multi-directional, its agenda extremely full. As for commenting in any detail, I will restrict myself to a few relationships and subjects of especial interest to Australia. The relationships are India's "Look East" policy, the continuing progress in India-China ties, and the welcome developments in India's relations with Pakistan. The subjects are trade and economic development, energy supply, and the vibrant global success story that is the Indian diaspora.

"Look East" is the appellation give to India's policy to engage comprehensively with Southeast Asia - an intention announced formally in 1994 - and, beyond that, with the wider Asia-Pacific. Indian commentators typically define the strengthened India-Australia relationship as within this broad orientation.

The Look East imperative has mutually-reinforcing economic, political and strategic dimensions. It has involved reinforcing bilateral political relations with the countries of ASEAN, with Japan and others, as well as developing political, economic and people-to-people links and dialogues at plurilateral or subregional levels. Last November India held its first summit dialogue with ASEAN leaders collectively.

The past decade has seen manifold expansion of trade and investment between India and the region and the pursuit of more liberal trading arrangements. The Look East agenda also has implications for the development of India's North-eastern states, for instance through creating a road infrastructure to link them with neighbouring Southeast Asia.

On strategic matters, India has since 1996 been a member of the ASEAN Regional Forum - the region's security dialogue mechanism - and has supported the forum's increasingly practical focus on the regional challenges posed by terrorism and other transnational security issues. India has also strengthened its bilateral security relations with a number of states in the region.

Related to but also going well beyond the Look East policy, is the constructive engagement between India and China. The problematic aspects of the historical relationship between the world's two most populous countries, are well known, but what is perhaps less reported internationally are the advances in recent years. Representatives of both countries have publicly spoken of putting to one side for the time being their unresolved differences over a 4000km Himalayan boundary, and moving ahead instead with building bridges in trade, investment and people-people relations, as well as wide-ranging dialogue, including on shared security concerns such as terrorism. Though from a low base, bilateral trade and investment between India and China is growing dramatically. The direct air link between Delhi and Beijing, established a year ago, is both symbolic and a channel for business and people-to-people interaction. Without pre-empting the Indian Prime Minister, it is safe to say that his visit to China, which concludes today, will have played a significant part in consolidating the trust essential for further progress.

There is now scope for progress also in India's relations with Pakistan. Like the rest of the world, Australia has watched India's relations with Pakistan with some concern in recent years. A little over a year ago we were gravely concerned at a prolonged period of confrontation and the risk of hostilities between two nuclear-capable states. Correspondingly, Australia has welcomed the more recent positive trend in India-Pakistan, with the resumption of full diplomatic relations and plans to restore transport links. Prime Minister Vajpayee's speech in Srinagar on 18 April was a very commendable first public step in a process that has real potential to create an environment in which the difficult issues in the India-Pakistan relationship can be addressed. Courageous and far-sighted leadership on both sides will be crucial to this enterprise of peace. At the same time, there is a need for Pakistan to take concrete action to ensure militant organisations and individuals do not use its territory to strike against India. The democratic election process in Jammu and Kashmir last year underlined that terrorist violence has no part in building a future for Kashmiris.

Economic policies to increase trade and investment, for the welfare of the people of India, are a thread common to all of India's international relationships. As an influential developing country in the World Trade Organisation India is particularly well placed to play an important role in keeping the WTO negotiations on track, including in the fifth WTO Ministerial Meeting in Cancun a few months from now.

India is seeking to encourage a more liberal trading environment in its region, through the South Asian Association for Regional Cooperation (SAARC) and its South Asian Preferential Trading Arrangement (SAPTA), and by negotiations on new agreements with regional neighbours, in addition to its successful free trade agreement with Sri Lanka. Like Australia, India recognises the potential for the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) to promote closer economic engagement within the wider Indian Ocean region, through forms of trade and investment facilitation that provide direct benefits to business.

One vital nexus of India's economic, security and foreign policy concerns is the need to ensure a reliable supply of energy to sustain the country's economic development needs and ambitions in the decades ahead. India openly acknowledges its dependence on energy imports and its requirement for what it characterises as "energy security". This is an increasingly apparent element of India's engagement with a wide variety of states, whether potential energy suppliers or other energy importers with which India has common interests in ensuring the protection of transit routes, including sea lanes.

Finally, India's international outlook is increasingly taking account of a latent reservoir of what it is now fashionable to define as "soft power" - the extraordinary Indian diaspora. Many years of people-to-people interlinkages, through migration, education, business and cultural exchange, are now beginning to pay dividends. Indian diaspora communities have found effective voice in a range of countries, including the United States. And is recognising these communities as its own - for instance through the introduction earlier this year of some dual citizenship arrangements. India's cultural exports, too, should not be overlooked in the context of its foreign policy interests. India moved quickly to re-establish a diplomatic presence in post-Taliban Afghanistan, and some of the most welcome cargo on the first flight from Delhi to Kabul was a box of videos - of Bollywood films with all their colour, drame and exuberance.

Opportunities for Australia

What does all of this mean for Australia?
At the very least, it provides a context for our relations with India. These are times of change and we need to be actively engaged with India, as we are. But while Australia might matter to India in some ways, so do many countries. If a country has a reason to want New Delhi's attention, it may have to compete, given the widespread recognition that India's weight in international affairs is increasing.

Both Australia and India are pursuing many interests in many directions. Our interests will not always be the first to intersect, and ours are two countries which will never be all things to one another. But which two countries are?

What I think is more noteworthy is that have substantial converging interests, due in part to the changing international environment. Second, we have developed a strong diversity of interaction. And third, the strengthening of the relationship has been rapid.

Three positive features are borne out when one looks at the four key areas of political, economic, strategic and people-to-people links. In each area, there are clear opportunities.


The political relationship

There is a substantial and steady exchange of Ministerial visits and interactions. The most recent was the visit to India in February 2003 by Minister for Trade Mr Vaile for the Joint Ministerial Commission with Indian Commerce and Industry Minister Arun Jaitley, as well as for discussions with the Ministers for Finance, Agriculture, Petroleum and Natural Gas, and Education.

Indian External Affairs Minister Yashwant Sinha is scheduled to visit Australia in August for the next bilateral Foreign Ministers Framework Dialogue, following Mr Downer's visit to India in April last year. And we hope that Prime Minister Vajpayee's postponed visit to Australia also takes place later this year, reciprocating the visit to India by Mr Howard in 2000.

There is also typically close and growing contact between Australian and Indian Ministers in international forums where both countries have significant common interests, such as the WTO.

These Ministerial-level contacts are underpinned by a widening and deepening range of official dialogues. Foremost among these are Senior Officials Talks, the most recent round of which was held in Delhi in mid-2002 at the level of DFAT Secretary Dr Calvert. The bilateral Strategic Dialogue was established in 2001, following the visit to Australia by Jaswant Singh in his then capacity as both External Affairs and Defence Minister. This mechanism attained considerably greater importance with the addition of subgroups dealing with defence, counter-terrorism and immigration issues when its second round was held in Canberra in March 2003.

On the economic front, as well as the involvement of officials in the Joint Ministerial Commission, and the related Joint Business Council, there are sector-specific economic dialogues, which also include representation by the business community of each country: the Joint Working Group on Energy and Minerals; and the Joint Business Group on Natural Fibres and Textiles.

Given the federal model of both our countries, it is not surprising that state governments are emerging as valuable players in the development of the relationship. The conclusion earlier this year of two Memoranda of Understanding between the dynamic states of Queensland and Karnataka - one on state-state partnership and one on higher education - is a case in point, part of a visit by Premier Beattie and a delegation pursuing interests ranging from biotechnology to mining.

Trade and investment

The economic relationship is robust and growing; each year since 1999 it has reached a new high. That same year India became Australia’s 12th largest export market. Two-way trade reached AUD3.4 billion in 2002, maintaining an average increase of 6.5 percent a year over five years, despite this being a period of regional and global downturn in demand. While bilateral trade is balanced in Australia’s favour, its expansion has been in both directions.

Along with exports, Australian investment is playing a key role in Indian economic growth. The Indian Government has identified Australia as its eighth-largest foreign investor. That investment is now more than AUD1 billion, much of it in fast-growing service sectors including IT, education, health, tourism, and leisure, media and finance, as well as mining and niche manufacturing. Increasingly, Australia is supplying industrial, agricultural and other products and services required by Indian manufacturers and consumers. For India, investment in Australia may be quite small but it is growing, with much of it in IT and the important energy and minerals sector (including copper mines and an ammonia plant).

This exciting rise in business engagement, of benefit to both countries, is linked to continuing growth in both economies and, importantly, to the ongoing economic transformation of both countries - in particular India's ongoing domestic economic liberalisation and reform.

The energy sector has been identified as of particular importance. Given India's growing energy needs, it is natural that interest is quickening in India in Australia's mining and energy technology and capabilities. India's Minister for Petroleum and Gas, Ram Naik is in Western Australia today, promoting Australian investment in India's latest hydrocarbon prospective blocks. The Minister for Mines Ramesh Bais, is planning a visit to WA and Qld in the coming weeks and a coal delegation is in prospect in September. Australian coal has long been a vital input into India’s industrial sector. Looking towards the energy of the future, Australia’s profile as a major supplier of Liquefied Natural Gas (LNG) has risen following last year's A$25 billion contract to supply China. Natural gas consumption is projected to rise strongly in India. India represents the largest emerging gas market in the Asia Pacific region. While the Middle East may be a natural supplier to western India, Australia is well located to be a reliable supplier to eastern India.

The strategic relationship

Moving to the domain of security proper, geography certainly is one factor in the convergent interests of our countries. Descriptions of Australia and India as Indian Ocean neighbours are more than just symbolic when one sees the proximity of India's Andaman and Nicobar Islands to Christmas Island. But most of all it is shifting global and geopolitical realities - such as the threat of international terrorism - which point toward convergence of interests and the logic of engagement.

At a time when much of the world is preoccupied with strategic uncertainty, it is noteworthy that Australia and India recognise one another as factors for stability in the Asia-Pacific and Indian Ocean regions. This point was made formally in a joint statement issued after their inaugural bilateral strategic dialogue in August 2001.

That dialogue was a significant step forward, substantive as well as symbolic, in a relationship, which had passed through a difficult period in the aftermath of India’s 1998 nuclear tests. For the first time, officials and uniformed officers from both sides met to share perspectives on a full range of global and regional security issues.

The success of that first formal dialogue, and an increasingly apparent convergence of security interests, including in addressing terrorism, helped influence both governments to expand the dialogue when it was held for a second time in March this year, raising the level of representation and adding subgroups on defence, counter-terrorism and immigration.

In conjunction with the enhancement of the strategic dialogue, the Australian and Indian Governments reached agreement in March 2003 on the text of a Memorandum of Understanding on Counter-Terrorism, which will be an important addition to the web of agreements both countries are developing with partners against terrorism. We expect this will be signed in August.

The wider defence relationship, which includes staff college exchanges and ship visits, has grown quickly since restoration of formal defence relations in 2000. This relationship holds real promise, building on a growing recognition of shared interests including in the Indian Ocean and on maritime and sea lane security issues.

This was underlined earlier this month when the frigate HMAS Adelaide visited Chennai on a dedicated goodwill visit, and took part in an exercise with an Indian vessel. At the same time Maritime Commander Rear Admiral Gates was meeting Indian counterparts to discuss next steps in developing an active relationship between the two navies.

People-to-people links

In political relations, trade and investment, and security, then, the news is good. However what I have found particularly striking - sometimes surprising - is the growing diversity and depth of “people-to-people” connections. This second track will help ensure the bilateral statecraft of our Governments translates into permanent outcomes. Australians and Indians are building professional and personal interaction, in education, tourism, business, culture, development cooperation, medicine, science and sport; in shared workplaces and in university campuses; in exposure to one another’s artistic triumphs, and of course on the cricket field.

The strength of the contemporary people-to-people connection between these two countries cannot simply be explained as a product of longstanding bonds, such as democratic systems of government, the Commonwealth or the English language. Cricket remains a tremendous window between our two societies, but in recent years Indians have come to know Australia for much, much more.

The Indian community in Australia has grown and is increasingly active, playing an important part in building the strength and dynamism of Australia’s society and economy.

The number of young Indians studying at Australian universities has grown dramatically (currently 9,000, a manifold increase on the figure a decade ago). Australia is the third most popular overseas destination for Indian tertiary students, and vies closely for second place. This surging education relationship inevitably will enmesh the wider Australian and Indian societies with one another. Education is an avenue for identifying and taking advantage of synergies between the two countries' experience and expertise. Both countries, for instance, have reputations for excellence in biotechnology research, and this has become one among a number of priority areas for building educational links.

Tourist and business travel in both directions continues to grow significantly. The Indian film industry's use of Australian locations and production facilities - helped actively by Australian government bodies - has helped literally to show the way. Last year Australia and India signed a memorandum of understanding to promote bilateral tourism. But while the double-digit growth that bilateral tourism has seen in recent years is of course impressive, we should see it as a starting point, for the incomes and horizons of middle-class India are continuing to expand.

Finally, I cannot speak of people-to-people connections without mentioning the Australia-India Council or AIC, the bilateral council funded by the Government through the Department of Foreign Affairs and Trade. Working closely with my High Commission, the AIC had enhanced a broad range of links, including institutional, cultural, educational, medical, scientific, sporting and media.

Conclusion

When one measures India's changing external outlook against the state of Australia-India relations, and what we know of Australia's strengths and its own national interest and external outlook, some opportunities become starkly apparent. If I was to identify three priority areas, I would say:

First: education, an investment in people-to-people relations

Second: trade and investment, especially in IT, biotechnology and the energy sector

And third: closer strategic and defence relations, especially in maritime security and counter-terrorism.

None of this is to say that the relationship has yet reached its full potential, or that the process of improvement is automatic. In many areas of joint enterprise, the journey remains at an early stage, and the challenge for our Governments will be to continue identifying and seizing the opportunities for practical partnership in policy and action. It is also a challenge for all of us who are interested in the bilateral relationship - including the business community.

We need to stay realistic about what can be achieved, how to get there, and how long it will take. But what is certain is that this bridge across the Indian Ocean is one worth building.