Indian PM Modi wraps up Australia visit with new agreements on migration, green hydrogen

“China’s economic coercion towards Australia in recent years, and the clashes along the Indian-Chinese border, are driving these two countries closer together quickly,” said Mr James Schwemlein, a nonresident scholar in the South Asia programme at the Carnegie Endowment for International Peace.

Australia has been looking to diversify its export markets, after diplomatic ties with its biggest trading partner China soured in the past few years.

Meanwhile, India is struggling to cut its import dependence with its neighbour on the back of a surging trade deficit.

However, experts said China will likely remain the largest trading partner to both nations, and efforts to significantly reduce economic ties to China continues to be an “aspirational dream”.

“There’s no question that India’s potential economically is a strong one – a democratic, fast growing, large country with a highly educated population and yet still relatively low wage labour,” Mr Schwemlein told CNA938’s Asia First.

“Competitively, India is an important way to respond to China. But (replacing China) is not something that is close to occurring today.”

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