De-Risking without Decoupling: Securitised Interdependence and Asymmetric Vulnerability among India, China, and Australia

Abstract

Intensifying geopolitical rivalry has raised questions about whether economic interdependence in the Indo-Pacific is giving way to decoupling. This study examines how asymmetric economic vulnerability shapes geo-economic de-risking among India, China, and Australia from 2014 to 2024. It compares India’s supply-side dependence on Chinese manufactured inputs and industrial supply chains with Australia’s demand-side dependence on the Chinese export market. The study employs a qualitative comparative design based on official trade statistics, government policy documents, and scholarly literature. Integrating Complex Interdependence Theory (CIT) with Geo-economics Theory, this analysis examines geopolitical shocks, sectoral adjustment, and the availability of alternative suppliers and markets. The findings reveal that geopolitical tensions do not necessarily dissolve economic ties. Governments selectively restrict trade, investment, and technology flows where alternatives are available and adjustment costs are manageable, while maintaining relations in sectors where disruption would be costly. India’s post-Galwan restrictions targeted Chinese investment, digital applications, telecommunications, and public procurement, but its reliance on Chinese industrial inputs persisted. Chinese restrictions on Australian exports similarly produced uneven effects: commodities that could be redirected adjusted more successfully than differentiated or highly focused products. India-Australia cooperation through trade, critical-minerals initiatives, and supply-chain partnerships can broaden both countries’ alternatives. However, it cannot fully replace China’s manufacturing capacity, processing infrastructure, or market size. The study conceptualises this pattern as securitised interdependence. It claims that geo-economic leverage depends less on aggregate trade concentration than on the direction of dependence and the cost, availability, and speed of substitution.