Australia Eyes Closer Economic Ties with India after Trade Row with China

Australia, which is emerging as a key partner of India in the Indo-Pacific region, is keen to expand its partnership beyond security and defence and is in talks with New Delhi to enter into a trade arrangement to boost its mining sector and wine sales following a trade war with China.

Australia is trying to woo India to fill the vacuum created by China in its mining sector investments and the import of wines.

Companies including Coal India Ltd are actively engaging with Australian miners.

Indian companies are being encouraged to invest in exploration and mining of coal, iron ore and critical minerals, according to people familiar with the matter.

Australia’s government, led by Prime Minister Scott Morrison, is in discussions to conclude a Free Trade Agreement with India to broaden trade ties.

This comes in the backdrop of a resilient supply chain initiative launched last year by India-Australia-Japan.

China has banned imports of Australian coal and the Australian government is looking at ways for wine exporters, hit by China’s trade restrictions, to enter the Indian market.

Morrison held a virtual summit with Prime Minister Narendra Modi last year and has been in touch with his Indian counterpart from time to time as ties between New Delhi and Canberra are coming of age. Both sides want to rebalance China’s aggression and the two prime ministers could be part of a virtual Quadrilateral summit in the near future.

Australia has been feeling the heat from China in the Indo-Pacific region.

China has already hinted at establishing a permanent military presence in the region.

This could give Beijing the ability to pressurise island states and Australia and sever critical supply lines with the United States. Australia is expanding its defence partnership across the region, including with India.

Australia has been on the “receiving end” of cyberattacks, influence operations, trade boycotts, diplomatic threats and espionage, according to experts.

India and Australia are exploring early harvest deals in trade after the low in the Beijing’s ties with Canberra.

India and Australia are exploring opportunities across agriculture, health, education and training, digital economy and defence.

India has a similar geology to Western Australia and untapped resources. There are significant opportunities for the Australian mining equipment, technology and services industry to work closely with India’s resources and rare earths sectors.

[Source: ET]