The Indo-Pacific Oration

I'm honoured to be here in New Delhi to present the inaugural Indo-Pacific oration at the Observer Research Foundation. I acknowledge the Australian High Commissioner, the Indian High Commissioner-designate, the US Ambassador, friends of Australia, friends of India.

ORF, I believe, has carved out an impressive record as India's leading strategic policy think-tank.

And the establishment of this oration represents another high point in what has been an extraordinary year for the relationship between our two countries.

Last September, you welcomed Prime Minister Tony Abbott to India.

Australia was honoured last November to host the first state visit of an Indian Prime Minister in almost three decades.

I think it is fair enough to say that it was far too long between visits but the warmth of the welcome that Prime Minister Modi received certainly made the wait worthwhile.

Indeed, I was waiting to greet him at Canberra airport on the evening of his appearance at a sports stadium full of Indian-Australians in Sydney, and they just would not let him leave. I waited, and waited. But I saw on TV that he was receiving a welcome that you would expect for an international rock star rather than a politician.

It was the personification of the impact Prime Minister Modi's leadership has had, not just here in India, but in Australia and other countries.

We are ready to seize the opportunity to forge an even closer relationship with India, there is new excitement and new energy about India's future.

That is clearly evident in the momentum that is driving our bilateral relationship. It is more dynamic, more diverse, broader and deeper than ever before. Indeed, unprecedentedly so.

But it is also evident in our increasingly close cooperation in the Indo-Pacific region, the region in which both Australia's and India's core economic and strategic interests converge.

For many decades Australia's eyes have been firmly focused to our north and east.

This is part of our history. More than seventy years ago, the war in the Pacific brought home to Australia that the security of our nation must be found in our own region.

In fact it was in 1950, just five years after the end of World War Two, that a predecessor foreign minister of Australia, Sir Percy Spender, said of Australia's place in the world.

"Geographically Australia is next door to Asia and our destiny as a nation is irrevocably conditioned by what takes place in Asia. This means that our future depends, to an increasing degree, on the political stability of our Asian neighbours, on the economic well-being of Asian people and upon the development of understanding and friendly relations between Australia and Asia. Whilst it remains true that peace is indivisible and what takes place in any part of the world may affect us. Our vital interests are closer to home. It is therefore in Asia and the Pacific that Australia should make its primary effort in the field of foreign relations."

Over time, the term "Asia-Pacific" became the short-hand for that increasingly influential region.

But 65 to 70 years on, I find that this term, this language, sells short many of Australia's strategic and economic priorities.

Indeed, Australia is blessed to sit between two great oceans – each of which is vital to our future.

Of course, we look east across the Pacific, to the island states of our own neighbourhood, and to our friend and ally the United States.

And for decades we have looked north, as our economic and, increasingly, our security partnerships with nations like Indonesia, Japan, China and South Korea have flourished.

But I think until quite recently, Australia has not spent enough time looking west. Across the vast Indian Ocean that happens to border my own electorate in Perth. I am very proud of the fact that my western boundary is, indeed, the Indian Ocean.

The focus on the west is not only recognising a geographic location. It represents a state of mind.

The increasingly dynamic Indian Ocean region is vital to Australia's future economic and strategic security. In fact, around half of Australia's naval fleet is located along our Indian Ocean coastline.

Our most elite soldiers – the Special Air Service– have been headquartered on the Indian Ocean since the regiment's inception in 1957. Indeed, they are also located in my electorate.

A century ago, it was from the port of Albany on Australia's west coast that our soldiers set out for the battle of Gallipoli, a battle that began on 25 April 1915. And, one in which Australian and New Zealand soldiers fought and, too often, died alongside Indian soldiers.

Next week we commemorate 100 years since the Gallipoli landings.

And I think one of the significant and more poignant and touching elements of the respective visits of our Prime Ministers was their public recognition and honouring of the links between our two militaries going back to the First Wold War.

Our shared histories have brought us together in the past and will help build our shared future.

In more recent times, the ports of Australia's Indian Ocean coast have been the lifeblood of our economy, as we've exported billions and billions of tonnes of iron ore which have helped build and modernise Asia's cities.

But, despite this, for too long the Indian Ocean aspect of our economic and security story has been underdone.

I believe that thinking of our region as the "Indo-Pacific" better reflects the reality of Australia's international outlook – both to the world and to Australians themselves.

Importantly, it also recognises that India is not at the periphery, but indeed, at the very heart of our strategic outlook.

During his address to the Australian Parliament in November last year, Prime Minister Modi spoke of the "Asia Pacific and Indian Ocean region", describing it as a "dynamic region holding the key to this world's future".

Clearly, Australia and India share a common view on the importance of the Indo-Pacific region. The reasons are clear.

We are living through an historic shift of strategic and economic gravity to the Indo-Pacific region. India's emergence as a major power is a significant part of this story.

Major trade, investment and energy flows are binding the great Indian and Pacific Oceans and their nation states into a new strategic arc where the prosperity and stability of one will be indivisible from the other.

Half the world's container ships, a third of bulk cargo traffic and two thirds of oil ships pass through the Indian Ocean, much of this across the top of the Indian Ocean from the Middle East, through the Malacca Straits and South China Sea to the major markets of North Asia.

This traffic is only likely to grow as India, China, Indonesia, Vietnam and other countries in the region grow.

And the Indian Ocean rim itself is home to nearly a third of the world's population, some 2 billion people, and takes in some of the globe's fastest growing economies and huge reserves of natural resources.

So today it makes sense for us to think of the Indo-Pacific. It connects the two great oceans and rightfully recognises India as a key player in Asia's strategic mix.

It underlines the crucial role that the maritime environment will play in our future strategic and defence planning.

It also recognises that India will become a far more important player in East Asia, as Prime Minister Modi has made quite clear with his shift from India's "Look East" policy to an "Act East" policy.

The great challenge of the Indo-Pacific era isn't the rise of any one power however, it is the way in which, for the first time in centuries, we manage a region which is home to many powers.

The recent significant US-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region is, I think, an excellent encapsulation of this point.

It is a recognition of how the powers of the Indo-Pacific must work together to promote peace, prosperity and stability.

It is consistent with the way in which Australia engages with India; supporting regional economic integration, safeguarding security, promoting shared values, strengthening regional architecture – particularly the East Asia Summit – and bolstering ties between regional powers for regional benefit.

In this era, as the economic and strategic importance of the Indo-Pacific grows, there's clearly an increasingly prominent role for India to play.

I believe India is rising to this challenge, and taking its rightful position as a world leader, as a super power.

Economic challenges, like the balance of payments crisis of the early 1990s brought home to India the fact that it could not reach its full potential without integrating into the global economy.

By expanding its economy, India has already delivered extraordinary gains for its people.

In the past two decades, both China and India's combined share of the global economy has increased more than five times over.

Hundreds of millions of people have been lifted out of poverty.

It is expected that in just 15 years' time, Asia's middle class will comprise more than 3 billion people.

It is logical that India would look at nations like China and others in the region, as examples of how trade, infrastructure and manufacturing can fuel nation-changing economic growth.

As we have witnessed with China, it makes sense that India's strategic weight will grow as its economy grows – and that India will now take on a more ambitious international role.

Former Prime Minister Singh contributed to fresh thinking in India about its place in the region and the world.

Prime Minister Modi has carried this momentum forward, and is carving a role for India as a mature strategic contributor in our region and beyond.

We must – all of us who live in this region – be strong, engaged contributors, playing a role in creating a better future for our people – and looking at new, mutually beneficial, ways of working together.

A changing India undoubtedly means a changing region – and it's a change that Australia welcomes.

It also explains why we're working with a shared vision to bolster wider Indo-Pacific regional co-operation, particularly through the Indian Ocean Rim Association, IORA.

For too long we've spoken of IORAs potential - always unfulfilled.

Established twenty years ago, it is only in the past few years, under the leadership of first, India, and now, Australia, and, hopefully, next Indonesia, that IORA has begun to assume status as a serious regional grouping.

Later this year Indonesia will take over the chair, followed by South Africa in 2017; that will mean four G20 countries consecutively in the chair. This must help IORA build momentum as an effective organisation.

Last year, as part of the Indian Ocean Rim Association's activities, ORF hosted the inaugural Indian Ocean Dialogue.

This event was so successful that, yes, Australia will host the second dialogue in September this year, with a focus on maritime security and trans-national crime, and we hope that ORF will again be centrally involved and we thank you for that support.

Our maritime interests are at the forefront of IORA's contemporary agenda. And our cooperation on what is called "The Blue Economy" provides an example.

The 'blue economy' encompasses the economic activity associated with our oceans, not only land mass, our ocean mass – everything from shipping to deep-sea fishing, energy production to coastal tourism.

I thought Prime Minister Modi put it in a rather evocative way when he said recently that he considers the blue chakra in India's national flag as a symbol of "blue revolution" - just as saffron represents an energy revolution, white the milk revolution, and green the agricultural revolution.

As you can see from our flag we have oceans of blue on it signifying our status as an island continent. But, utilising the blue economy is central to economic growth and job creation in all the IORA member states.

However, utilising the ocean's resources needs to be done sustainably. It requires scientific research and innovation –and they both happen to be among Australia's and India's strengths.

Our scientific bodies such as our premier scientific research body the CSIRO and the Australian Institute of Marine Science and India's National Institute of Oceanography, headquartered in Goa, are at the forefront of scientific research into oceans.

We are working to commercialise the discoveries produced by this research and to make them available across the region. This process is accelerated by innovative research partnerships and the sharing of knowledge.

IORA also provides a platform for working together against threats of trans-national crime, including terrorism and piracy.

Recent experiences in the Indian Ocean have shown that concerted international cooperation is vital and can be successful.

As a result of collective action, piracy off the Horn of Africa no longer poses the major threat to the region that it did several years ago.

However, we must remain vigilant. Ongoing naval operations, including through the Combined Maritime Forces, will remain crucial to maintaining regional maritime security in the short to medium term.

IORA also provides a mechanism for combating other trans-national crimes, such as drug smuggling and people trafficking – crimes that have a deep impact on our communities.

Thanks to that co-operation, we are now intercepting far more heroin from Afghanistan than we have in the past.

That is why we are looking to establish, through IORA, a Maritime Crime Forum, with support from the United Nations Office of Drugs and Crime.

This forum will promote intelligence sharing and capacity building across the Indian Ocean, in recognition of the fact that crime is transnational; it disregards national or even sub-regional boundaries.

We are fortunate that the Indian Ocean waters we share remain largely free of the kinds of territorial disputes that we've seen on the other side of the Malacca Straits.

IORA can and should act as a safeguard against such disputes arising, as can our co-operation through the region's premier security forum, the East Asia Summit.

IORA is an important part of the regional framework through which habits of cooperation, consultation and negotiation are built in order to help ensure the continuing peace of the region, and the prosperity that peace enables.

That's why our cooperation really matters – and it is why we welcome the emphasis that Prime Minister Modi has placed on strengthening co-operation through IORA during his very successful recent visit to countries of the Indian Ocean.

The past year has been an exciting one for India and Australia at the bilateral level.

In the second decade of the 21^st century, our interests are converging in a way they haven't always done before. We both want a vibrant, inclusive region that's engaged with the world. We both welcome regional institutions that help manage tensions.

We both see the United States as a friend and partner – although our respective relationships are quite different with the United States.

We each want a constructive, mutually advantageous relationship with China.

We share a commitment to democracy, respect for the rule of law and global norms, an independent judiciary and individual liberty of our citizens. We embrace freedom.

These values underpin our approach to regional, and global, engagement.

Together we have more to offer our region than we do separately.

In Australia during his visit Prime Minister Modi said "India's development, demography, and demand provide a unique long term opportunity for Australia, and all in the familiar framework of democracy. There is no other example of this nature in the world".

He's right.

There are unique opportunities for our nations to co-operate and collaborate to improve the quality of life of the Indian people and the Australian people.

As India develops, its need for secure sources of energy is growing. Australia can help provide that security indeed we want to be the partner of choice for India's energy security; coal, gas, uranium.

We have signed a Nuclear Cooperation Agreement, last September, and we are negotiating the administrative arrangements so that we can supply uranium to India.

The new Framework for Security Cooperation which we agreed with the Indian Government last November is also a big step forward in our partnership.

This framework sets an ambitious agenda for us to enhance our cooperation across a broad range of areas, including maritime security and cyber policy.

The best testament of our strength and security cooperation will be practical – although meetings and discussions are always important too.

The transformation over the past decade of India's navy gives it greater capability to work in concert with the navies of its neighbours, including Australia.

Not only has the Indian navy joined the bi-annual RIMPAC exercises, but later this year Australia and India are holding our first bilateral maritime exercises.

India's leading role on regional maritime issues is evidenced by its far-sighted decision back in 2008 to establish the Indian Ocean Naval Symposium. And this symposium, along with IORA, is crucial to building the under-developed regional architecture we need to achieve a truly collaborative approach to maritime security in the Indo-Pacific.

Australia shares this objective with India.

We hosted the symposium last year, and the Australian Chief of Navy has assumed it's chairmanship until 2016.

This kind of engagement is a precursor to an even closer security relationship in the years ahead.

In many ways, I see the relationship Australia shares with India following the path pioneered by our post-war relationship with Japan.

Often, it is the economic relationship between countries that sets the foundation for a closer and broader strategic relationship, and that's certainly what happened with Australia and Japan – a nation that is now a very close friend of us both.

I marvel at the fact that in 1957 – barely more than a decade after the horrors of the Second World War – Australia and Japan signed a landmark commerce agreement that paved the way for our modern trade and investment relationship.

By the 1970s, and for much of the next forty years, Japan was our biggest trading partner.

As our relationship matured, it also expanded – to defence and security co-operation, both bilaterally and through regional forums, and working together with shared partners including the United States. The people-to-people links deepened enormously.

India is now Australia's 7^th largest export market and our economic ties are growing rapidly. Earlier this year my colleague, the Minister for Trade and Investment Andrew Robb, led Australia's largest ever business delegation to India. About 450 senior business representatives from Australia were in that delegation.

I think in the past, Australian investors have seen some difficult challenges, and it's a fact that some investors left the Indian market.

But India's recent move to liberalise its foreign investment caps in some sectors, such as insurance, is being very warmly welcomed.

As Prime Minister Modi's economic reforms progress, the climate for investors will continue to improve.

Some very progressive and competitive Indian State governments are also helping to create a more positive investment climate for Australian businesses. And we are more than happy to reciprocate. We are open for business, we are particularly open for Indian investment in Australia and we welcome it.

Recent major Indian investments in the Australian resources sector are a testament to that.

The returns will be even greater if we can finalise a Free Trade Agreement - the Australia-India Comprehensive Economic Cooperation Agreement which is a key priority for Australia's engagement with India in 2015.

CECA, as it's called, has the capacity to unleash new potential for economic co-operation and integration.

After Australia's success in concluding negotiations with Japan, South Korea and China last year – we have three Free Trade Agreements, with those countries - Australia is engaged and ready to complete the Asian quartet.

We want a Free Trade Agreement with India - a commercially meaningful agreement that will help propel both of our economies forward and enable our people to realise their full potential. More job opportunities, more opportunity to trade goods and services.

The Australia-India relationship of the future can certainly be much bigger and broader than just one based on our shared inheritances.

The Westminster system of government has served us both well, and I certainly won't deny that we both share a passion for cricket and I'm pleased that if India had to hand-over the World Cup to anyone, then it was to us.

But what we can achieve together in the years ahead will go beyond the cricket field, systems of government, or the English language.

It will be about building trust, gaining understanding and increasing the bonds between our people.

As Prime Minister Modi said when he addressed the Australian Parliament, new pathways to prosperity do not come from travelling down the roads of the previous century.

India is travelling a new road at the beginning of the 21^st Century.

It is a road filled with opportunity, with some heady expectations – and of course with some risk and complexity.

We must continue to work together to drive economic growth and opportunity, and to address the strategic challenges that our region faces.

There will always be competition alongside our co-operation, that is only natural in a world of nation states, but I am an optimist, and it is how we manage that competition that will determine our future.

It is up to us, the nations of the Indo-Pacific, to determine what the 21^st Century – the so-called "Asian Century" – will look like.

In Australia, India has a trusted partner and a close friend.

I have every faith that we'll walk the road together into a bright future with a deep and enduring relationship. We are natural partners. We are natural friends.