India a strategic opportunity

Australia is almost singularly focused on a rising China, yet while the resource-led boom offers governments significant revenue through taxes and royalties, little thought or consideration is given to India, a nation which shares strategic space with Australia.

In the medium to long term, the fact that Australia ignored India’s potential for so long might seem illogical, especially because both countries share important strategic space. While discussion regarding shared strategic space is only now emerging, this common space predates the formation of the Australian nation.

In the very early days of the British colony in Port Jackson – now Sydney – India served as a critical lifeline for supplies and food. In the 1790s the English government considered that the costs of supporting, and supplying, this infant colony could be done more efficiently, and economically, from Calcutta rather than from London.

During the first decades of settlement, economic linkages between Port Jackson and India were significant. In 1817, it was even noted that three out of 10 ships that reached Sydney – from overseas ports – came from Calcutta.

In the contemporary era there have been a number of important milestones, which could signal a return to greater economic, and eventually strategic, linkages between Australia and India. One of these milestones occurred in 1986. It was at this point that the Indian economy began transforming its status from a net importer of capital to a net exporter.

Concurrently, India ceased to be a net importer of food. This juncture of events proved to be the tipping point for India’s strategic fortunes and, because of shared geopolitical spheres, for Australia as well.

While a number of important milestones have already been achieved, future milestones will continue to change India’s strategic fortunes. However, at present, there is not yet a comprehensive framework for engaging with India. Australia could use its proximity, as well as a common colonial past, to shape a coherent policy for its relationship with this emerging power.

Western Australia would be well positioned for an improved Australian-Indian relationship. In fact, new population centres in the north of WA could become important commercial hubs to reengage with India, as Sydney did once with Calcutta.

Whereas the Swan River colony, now Perth, once proved suitable for British naval policy – in part blocking France from colonising the south-west of Australia – population centres in the north of WA may be the best strategy for integrating into an Indian Ocean economic system dominated by India.  

However, in spite of the economic potential of India, little attention is paid to India’s existing and possible role as a major strategic power. In military terms, the Indian Ocean will become a much more dynamic strategic theatre.

India has developed, and is now deploying, strong anti-shipping and land attack missile capabilities into the Indian Ocean, which Australia is not yet prepared to meet. There will also be a gap between Australia’s current capabilities and the introduction of its proposed shore-based deployment joint strike fighters.

The Indian navy’s submarine capabilities – particularly with the addition of anti-shipping supersonic BrahMos cruise missiles – provide a capability in the Indian Ocean against which Australia has little defence.

Within two decades, India will be able to deploy advanced carrier-based air power into the Indian Ocean in a fashion which Australia will be seen to be unable to match. Evidence of this increased power came on December 1 2005 when the Indian flag officer commanding-in-chief of western naval command, Vice-Admiral Madanjit Singh, announced that India’s second aircraft carrier Admiral Gorshkov, acquired from the Russian Navy, was expected to arrive in Mumbai in the first half of 2008.

He added that the carrier had undergone several modifications and had been fitted with some Indian equipment, and would undergo a year of trials in Russia.

Interestingly, Vice-Admiral Madanjit Singh said: “India’s first indigenous aircraft carrier is expected to be ready within eight years. By then, we expect the naval version of light combat aircraft to be ready.”

The Indian naval development program has also been supported by a new, more expansive, strategic naval blueprint. In light of an expanded acquisition program, the Indian navy chief admiral, Arun Prakash, stated on December 2 2005 that India’s new military hardware would give it greater clout in the strategic energy corridors of the Indian Ocean.

He also said the Indian navy, besides constructing or buying ships, submarines and aircraft, was also building ties with countries in the region to expand its blue water reach in the Indian Ocean.

By expanding its reach in the Indian Ocean, India is beginning to match its strategic ambitions with the reality that seaborne trade and energy routes are increasingly important.

Arun Prakash noted this importance: “The Indian Ocean is now the highway along which over a quarter of the world’s trade and energy requirements move. The Asia-Pacific region holds immense promise for political, economic and military cooperation and the vital role maritime forces play in this regard makes the Indian navy a key component of the nation’s foreign policy.”

While India’s potential can be demonstrated by its economic and military advancements, these should be kept in perspective, especially as the economic growth forecasts underpinning much of this expansion are formed by linear-based assumptions.

India has not opted for a mass-manufacturing base like China; it has developed a sophisticated IT and back-office support services industry. While these sectors are often used to highlight India’s potential, their actual impact is limited.

It should be noted that the total number of workers in all IT-related jobs in India amount to less than one million workers.

This is only one quarter of 1 per cent of the Indian labour force. Furthermore, the World Bank estimates that it takes 71 days in India to start a business (compared with six days in Singapore) and 425 days to enforce a debt contract (compared with 69 days in Singapore).

And despite a period of impressive growth, at the 2004 Indian general election the “Shining India” election pitch of the incumbent government was rejected, as it did not incorporate the aspirations of a large number of India’s poor.

Since 1986, while India slowly lunges sideways, and occasionally forward, China has rapidly reorganised itself, and altered its economic fortunes.

As a result, Chinese companies, now signing major resource deals, dominate Australian and WA newspaper headlines. And while Australia is well positioned for China’s economic expansion, it has exposed Australia to the impact of the Chinese economy faltering, or even contracting.

Australia could benefit from considering the implications of sharing an ocean, as well as strategic space, with an emerging power and not overweight its expectations on China’s fortunes. In the long term, there is potential for India to emerge as a regional and even global power.

An expanding India, which is also the world’s largest democracy, will increasingly share strategic space with Australia.

Whereas the early British colonies depended on India for critical supplies, Australia has the opportunity to take advantage of, and benefit from, the emergence of India as a key regional power.

• Andrew Pickford is research manager at Future Directions International and also edits the Weekly Global Report.