Modi seals deals to boost military ties with Australia

He urges region to overcome 'historical differences'

This article was first published on Nov 19, 2014

Indian Prime Minister Narendra Modi has agreed to closer military ties with Australia, warning that growing concerns about maritime security posed a threat to the region's prosperity.

Just a day after Chinese President Xi Jinping addressed Australia's Parliament and pledged to peacefully resolve maritime disputes, Mr Modi addressed the same Chamber and called for countries in the region to overcome their "historical differences".

Marking the first visit by an Indian leader to Australia in 28 years, Mr Modi also declared yesterday that India's economic climate was changing, which will pave the way for greater trade. India is set to sign a free trade deal next year with Australia, which on Monday finalised plans for a similar agreement with China.

"This vast region has many unsettled questions and new challenges," Mr Modi said. "The oceans are our lifelines but we worry about access and security in our part of the world more than ever before."

Within hours of Mr Xi leaving Canberra for Tasmania, Mr Modi and Australian Prime Minister Tony Abbott revealed they had signed a series of sensitive security agreements.

The leaders agreed to regular meetings between their defence ministers, regular maritime exercises and regular military-to-military staff talks.

A joint statement said the deals would involve closer collaboration across "defence, counter-terrorism, cyber policy, disarmament and non-proliferation and maritime security".

They will also cover joint defence research and development.

Noting that Australia and India are both democracies, Mr Modi said: "India's development, demographic and demand provide a unique long-term opportunity for Australia and all in the framework of democracy."

"There is no other example of this nature in the world," he added, in what some said was a veiled reference to China.

Australia and India have long struggled to develop warmer military or trade ties in a relationship that analysts lament has focused excessively on the two nations' shared passion for cricket.

Trade between the countries last year was worth just A$12 billion (S$13.5 billion), a fraction of Australia's A$151 billion trade with China.

"We want to go further and that's why the next priority for Australia is a comprehensive economic partnership agreement with India," Mr Abbott said.

"If I may say so, this is a moment in time. This is the time to get this done."

Mr Modi said he believed India's continued growth would lead to a greater demand for Australian resources.

The Indian leader was decisively elected six months ago on a platform of aggressive economic reform, though he has already been criticised for acting too slowly.

Addressing his critics, he told Parliament: "The economic climate in India has changed. I believe it will be a lot easier to convert opportunities into concrete outcomes."

Analysts said trade talks may prove difficult because there were potential areas of competition, particularly in the services and agricultural sectors.

An expert on India-Australia relations, Dr Pradeep Taneja, from Melbourne University, said India's growth plans in the coming years will boost its demand for Australian gas and coal exports.

"India is going to develop fairly rapidly if Prime Minister Modi's plans come to fruition and that would require a lot of imports of energy," he told ABC News.

"Apart from coal, I think India could become a major importer of natural gas from Australia."

India and Australia also agreed to speed up plans for Australia to sell uranium to India to assist its energy needs.

Canberra agreed to such a sale in September, when Mr Abbott was in New Delhi, even though India is not a signatory to the nuclear Non-Proliferation Treaty.