Australia-India Comprehensive Strategic Partnership: 7 Shocking Truths Exposing Its Untapped Power and Hidden Risks

Australia and India’s Comprehensive Strategic Partnership, signed in 2020, has driven significant advances: bilateral trade doubled to $50 billion, defence collaboration deepened through joint military exercises, and critical minerals cooperation gained traction. Yet substantial gaps remain. Australian investors still hesitate, allocating just 0.6% of foreign funds to India due to regulatory concerns and risk aversion. Engagement remains lopsided, with minimal Australian students or tourists heading to India despite massive Indian inflows.

Defence ties, while symbolically strong, lack industrial synergy and technology co-development. To mature, India must address investor trust through bankable reforms, while Australia should move beyond seeing India as just a “China alternative” and actively foster two-way ties. Shared priorities like critical minerals processing—not just extraction—demand urgent action to counter China’s dominance. The next phase must convert diplomatic ambition into tangible economic and strategic resilience.

Australia-India Comprehensive Strategic Partnership: 7 Shocking Truths Exposing Its Untapped Power and Hidden Risks

When Prime Ministers Modi and Morrison signed the Comprehensive Strategic Partnership (CSP) in June 2020—via video link amid pandemic isolation—the agreement promised to transform a historically lukewarm relationship. Today, as leaders mark its fifth anniversary, the partnership reveals both tangible progress and revealing gaps that could define its future trajectory. 

The Ground Gained 

The CSP’s successes are measurable:  

• Trade doubled from $25B (2020) to $50B (2023), accelerated by the Economic Cooperation and Trade Agreement (ECTA).  

• Defence integration deepened with joint naval exercises (Malabar), air combat drills (Pitch Black), and intelligence-sharing via India’s Indian Ocean Fusion Centre.  

• Critical minerals collaboration emerged as a shared priority, though execution remains challenging.  

• Migration reforms eased pathways for skilled Indian workers—a pragmatic win for Australia’s labor shortages and India’s talent export. 

These strides reflect a strategic convergence: both nations now explicitly view a stable Indo-Pacific through the same lens, driven by shared concerns over China’s assertiveness and supply chain vulnerabilities. 

The Unresolved Tensions 

Beneath the milestone optics, persistent asymmetries demand candor:  

• Investment Paralysis: 

Australian super funds remain skeptical of India’s market, allocating just 0.6% of foreign investments there. The hurdle isn’t opportunity but trust—perceptions of regulatory unpredictability and bureaucratic friction. As one Sydney fund manager noted anonymously: “We see intent, but not yet the ecosystem.”  

• The One-Way Street of Engagement: 

Indian students flock to Australia (over 120,000 in 2024), yet Australian enrollment in Indian universities is negligible. Tourism mirrors this imbalance. This isn’t just cultural apathy—it signals a failure to translate government agreements into grassroots appeal.  

• Defence: Cooperation vs. Co-Dependence: 

While joint exercises impress, technology transfers and co-development projects (e.g., drones, undersea surveillance) lag. Without industrial synergy, military ties risk remaining symbolic.  

• Domestic Headwinds: 

The Khalistan activism debate in Australia and “spy nest” allegations exposed how diaspora politics can strain diplomatic ties—a vulnerability requiring nuanced crisis management. 

The Road Ahead: From Transactional to Transformative 

For the CSP to mature, both capitals must confront uncomfortable truths:  

• India needs to address investor concerns with bankable reforms, not rhetoric.  

• Australia must move beyond seeing India as just a “China alternative” and invest in long-term economic diplomacy—including education exchanges into India.  

• Both should prioritize critical minerals processing partnerships (not just extraction) to counter Chinese market dominance.