1. The ‘2+2’ dialogue between India and Australia will provide substance to an already meaningful partnership
Context: A few days ago, India’s Defence Minister and External Affairs Minister held the inaugural ‘2+2’ talks with their Australian counterparts. Both countries are taking several steps to implement their vision of a peaceful and prosperous Indo-Pacific region.
About ‘two plus two dialogue’: It is a term used for installation of a dialogue mechanism between two countries’ defence and external affairs ministries.
It indicates that two appointed ministers from each country, the ministers of defence and external affairs in this case, will meet up to discuss the two countries’ strategic and security interests.
The goal is to establish a diplomatic, yet fruitful, conversation between the two countries’ respective heads of defence and external affairs.
Positive trajectory of relations between India and Australia
Comprehensive strategic partnership: The relation was elevated from bilateral strategic partnership to a Comprehensive Strategic Partnership in June 2020.
Convergence: There is a growing convergence of views on geo-strategic and geo-economic issues backed by a robust people-to-people connection. Both countries have an enduring interest in a free, open, inclusive and rule-based Indo-Pacific region including stability and freedom of navigation for all nations in the region.
Common value system: Both are vibrant democracies which have respect for international laws and a belief in the equality of all nations irrespective of their size and strength.
International cooperation: Both countries have stepped up collaborations through institutions and organisations on many issues in bilateral, trilateral, plurilateral and multilateral formats.
Elevation of 2+2 dialogue to ministerial level: Elevation of ‘2+2’ Foreign and Defence Secretaries’ Dialogue to the ministerial level emphasises the positive trajectory of their transforming relations.
Security Calculations: In order to enhance regional security architecture, both countries have intensified bilateral security cooperation. They have also stepped up security dialogue with key partner-countries to deepen coordination in areas where security interests are mutual.
Deeper engagement between Quad countries at the strategic level and at the tactical level.
The Malabar naval exercise by the Quad (Australia, India, Japan, the U.S.) is a step in this direction. It also allows the navies to develop and enhance advanced warfare tactics.
Trade: Two-way trade was valued at $24.4 billion in 2020. It has seen remarkable growth in recent years. The Indian economy is not only one of the largest economies in the world, but it is also going through a tectonic economic transformation.
Similar intentions: Australia values a rule-based international order and believe in inclusive economic integration in the Indo-Pacific region, and face challenges from a belligerent China.
Diversity: Trade is rapidly growing and encompasses agribusiness, infrastructure, healthcare, energy and mining, education, artificial intelligence, big data and fintech.
Long term sustainability; Both countries are working to build a long-term sustainable economic relation.
An early harvest agreement: announced in a joint communique last month by December, which will pave the way for an early conclusion of a Bilateral Comprehensive Economic Cooperation Agreement between both countries.
Challenges in Increasing Trade: India and Australia need to resolve old issues that pose a barrier to deeper economic integration.
India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
India faces non-tariff barriers and its skilled professionals in the Australian labour market face discrimination.
Forging a deep partnership:
It is expected that the ‘2+2’ dialogue will provide substance to this partnership.
Expected meetings between the two Prime Ministers will further deepen political understanding and open more avenues for collaborations.
Beyond bilateralism, both countries are also entering into partnerships with like-minded countries, including Indonesia, Japan and France, in a trilateral framework.
The Quad has gained momentum in recent months. The time is ripe for these countries to deliberate on a ‘Quad+’ framework. The geo-political and geo-economic churning in international affairs makes it imperative for India and Australia to forge a partnership guided by principles with a humane approach.
2. We can ensure that manufacturers overcome their reluctance to enter the electric vehicles market
Context: Developments in the electric vehicle segment.
Incentives: The egovernment increased the FAME-II incentives for electric two-wheelers (E2W) to ₹15,000/kWh.
State-level programs: more States such as Gujarat and Maharashtra have announced State-level electric vehicle incentives as part of their State policies.
Start-ups: many startups are launching new electric two-wheeler models.
Results: E2W sales in India are likely to at least double in 2021 compared with 2020 levels.
Wide market to explore: E2Ws will account for less than 1% of new two-wheeler sales. This is in part because the industry leaders (Hero MotoCorp, Honda, TVS, Bajaj, Suzuki, Royal Enfield and Yamaha), who account for nearly 99% of all two-wheelers sold in India, offer only two electric models between them, and only in a handful of cities.
Overcoming reluctance: as done by the US in two ways:
By establishing a zero emission vehicles (ZEV) credit programme: This requires manufacturers of vehicles to ensure that either a certain fraction of their sales are ZEVs or that they purchase ZEV credits from manufacturers who have sold more ZEVs than required by the credit programme. There are many possible regulatory approaches by which India could set up such a programme, for example, those adopted by California and several U.S. States.
Putting in place stringent fuel efficiency/CO2 emission standard: stringent enough that it can best be met by making and selling ZEVs, so that mainstream manufacturers introduce electric vehicles in meaningful numbers.
Disincentivizing other means: A mandate requiring producers to build and sell electric vehicles, or efficiency standards stringent/ambitious enough to make building and selling electric vehicles the most profitable thing for them to do. Petrol prices being above ₹100/litre and an E2W purchased today will contribute to an absolute reduction in greenhouse gas emissions.
Advantages of electric vehicles:
Cost effective: E2W are cost effective on total cost of ownership basis today, and likely to reach upfront cost parity later this decade.
Environment friendly: E2W will reduce greenhouse gas emissions and will be a cost-effective alternative for manufacturers to do so if tailpipe CO2 standards are set at stringent levels.
Way forward: What we need now is for the Bureau of Energy Efficiency and the Ministry of Road Transport and Highways to set 2W fuel consumption standards at 25gCO2/km in 2025 and 20gCO2/km in 2030. Doing so will not only ensure a 30% E2W share in 2025 and a 60% E2W share in 2030, but it will also pave the way for India to transition completely to E2W across all two-wheeler segments by 2035.