Indian Council of World Affairs

Abstract: Navigating the geopolitical complexities of the world, India and Australia, are set to celebrate five years of their Comprehensive Strategic Partnership (CSP) in 2025. Apart from the traditional areas, the two crucial areas that are emerging in this bilateral relationship and can re-define the scope and scale of their partnership in the years to come are: partnership in renewable energy and critical minerals. 

On 19 November 2024, the Prime Minister of India, Narendra Modi, and the Prime Minister of Australia, Anthony Albanese, met on the sidelines of the G20 Summit in Rio de Janeiro, Brazil, for the second India-Australia Annual Summit. The first Annual Leaders’ Summit was held in March 2023 in New Delhi, during Australian Prime Minister Albanese’s visit to India. India-Australia bilateral relations have made significant strides in recent years, with ties being elevated in areas ranging from diplomatic, security, defence, economic, and people to people ties. The coming year will mark the fifth anniversary of the India-Australia CSP, agreed during the virtual leader’s summit in 2020. 

The bilateral relationship between India and Australia has progressed overcoming reservations of the past. The rationale for this change has been the evolving geopolitical situation in the larger context of the Indo-Pacific. Political leadership from both sides has invested in building mutual trust and understanding between the two countries. Australia recognises India as a top-tier security partner for Australia.[i] At present, India and Australia also share greater strategic alignment, with their commitment to a transparent, open, secure, inclusive, and rules based order in the Indo-Pacific. 

At the Summit in Rio, the two sides took stock of the whole range of bilateral relations. The joint statement mentioned that both sides have made significant progress in important sectors “including in the area of trade and investment, defence and security, climate change and renewable energy, education and research, skills, mobility, science and technology, regional and multilateral cooperation, community and cultural links, and people-to-people ties”.[ii] They also acknowledged that positive closer bilateral engagement has not only benefitted the countries but the entire region as well.  

Besides the growing areas of cooperation in bilateral relationship like maritime cooperation, defence and security cooperation, and economic and trade relations with the Economic Cooperation and Trade Agreement (ECTA) in place since 2022, the two crucial areas that are emerging in the partnership and will be significant in the future include cooperation on green and clean energy and critical minerals. 

Renewable Energy 

One of the key outcomes of the Rio Summit between the Prime Ministers of the two countries was the official launch of the Renewable Energy Partnership (REP). India and Australia are already cooperating under renewable energy related projects and the signing of the REP will further boost such cooperation. The REP aims to “provide the framework for practical cooperation in priority areas such as solar PV, green hydrogen, energy storage, two-way investment in renewable energy projects and allied areas and upgraded skills training for the renewable workforce of the future.”[iii]

The Australia Department of Climate Change, Energy, Environment and Water in its statement on 20 November 2024 mentioned that the REP “is a significant milestone in India-Australia cooperation and will guide our climate and energy cooperation. Australia is committed to working with India to seize the economic opportunities of the net zero transition”.[iv] The statement also mentioned that joint projects are already underway in solar PV and green hydrogen, which will continue under the REP, the other six areas mentioned in the partnership will be detailed through a new Track 1.5 Dialogue to explore ways of cooperation.[v]

India and Australia with their shared commitment to drive climate action, are doing “so much work together on driving renewable energy transition to meet our net zero targets” said PM Albanese.[vi] The two countries have already set up a Green Hydrogen Taskforce in 2023, comprising experts from both sides, to explore the possibilities of cooperation on trade, commercial and research opportunities between the countries, through the manufacturing and deployment of green hydrogen. The taskforce will provide recommendations to the government on opportunities to develop the hydrogen industry. To begin with, the taskforce will focus on “hydrogen electrolysers, producing of green hydrogen and fuel cell manufacturing and supporting infrastructure, standards and regulations.”[vii]

India and Australia have a shared ambition to move faster, work together and deploy complementary capabilities to drive climate action. Australia is also a part of the International Solar Alliance (ISA), intrinsic to India’s regional and global commitment to climate change agenda, which aims to drive change “by enacting policies and regulations, sharing best practices, agreeing on common standards, and mobilising investments, to improve overall energy access and security worldwide and promote solar power as a sustainable transition to a carbon-neutral future.”[viii]

The REP is a significant development that will boost two-way investments in the renewable energy sector. Sustainable renewable energy is the need of the hour for the effective global clean energy transition. Such a partnership between countries is significant in pushing the momentum towards green and clean energy and combating climate change. 

Critical Mineral 

Another area that is experiencing rapid growth in cooperation between India and Australia is critical minerals. With the growing need for lowering emissions technology and clean energy, this is emerging as an important area of partnership for two countries. Critical minerals and rare earth metals elements like lithium, nickel, cobalt, manganese and graphite are crucial for electricity, wind turbines, solar panels, defence and telecommunication field and so on. They are crucial in two critical industries that are in focus in India right now: electric vehicles and semiconductor chip manufacturing. 

The global demand for such minerals experienced strong growth in 2023, with lithium demand rising by 30 percent, while the demand for nickel, cobalt, graphite and rare earth elements, all increased about 8 percent to 15 percent.[ix] China currently leads the critical mineral production in the world, accounting for about two-thirds of the world’s processing/refining capacity for critical minerals;[x] while other countries, like Australia, are enhancing their capacities. Global demand is expected to only grow in the future as clean energy transitions gather momentum with countries enhancing efforts to reduce emissions and secure a reliable and resilient supplier for such minerals. Here, India’s relationship with Australia is important. 

Australia has some of the largest reserves of critical minerals such as lithium, cobalt and vanadium. It produces almost half of the world’s lithium, and is the second-largest producer of cobalt and the fourth-largest producer of rare earths.[xi] Australia can be a reliable supplier for India’s growing energy requirements. India provides an important market for Australian coal, LNG and uranium. A bilateral agreement signed in 2020 between the Ministry of Mines, Government of India and the Department of Industry, Science, Energy and Resources for Australia, Government of Australia, for ‘Cooperation in the Field of Mining and Processing of Critical and Strategic Minerals’ like antimony, cobalt, lithium and rare earth elements[xii] is an example of growing cooperation between the two countries.  At the second Virtual Summit in 2022 an MoU on Co-Investment in Australian critical minerals projects between Khanij Bidesh India Ltd. (KABIL), India and Critical Minerals Facilitation Office (CMFO), Australia was agreed.[xiii] At the Rio Summit, the Prime Ministers noted the progress under the MoU, recognising that it provides “an opportunity to grow commercial links and advance supply chain diversification interests”.[xiv]

India is working with partner countries under the Minerals Security Partnership (MSP) that “aims to accelerate the development of diverse and sustainable critical energy minerals supply chains through working with host governments and industry to facilitate targeted financial and diplomatic support for strategic projects along the value chain. Australia is one of the key MSP partners for India. India’s increasing demand for critical minerals is an opportunity for Australia. Both countries can be perfect partners in the present phase of the global clean energy transition. India-Australia Critical Minerals Investment Partnership has witnessed progress with bilateral talks held between the two countries in March 2023 when the then Union Minister for Coal, Mines and Parliamentary Affairs, Pralhad Joshi and Australian Minister for Resources and Northern Australia, Madeleine King, met in New Delhi. At the meeting, the two sides recognised that “both countries have reached a major milestone in working towards investment in critical minerals projects to develop supply chains”, and “indentified five target projects (two lithium and three cobalt) on which to undertake detailed due diligence.” Australian Minister King said that  “India’s goals to lower carbon emissions and boost electric vehicle production presents great opportunities and prospects for Australia’s critical minerals sector, for renewable exports and for building stronger supply chains”.[xv] Therefore, cooperation in critical minerals is a crucial area to look forward to in the bilateral relationship. 

Cooperation in Traditional Areas 

Apart from the newer, emerging areas of cooperation, the India-Australia relationship is progressing well in other traditional realms. At diplomatic and political levels, there have been frequent high-level interactions between the two countries, including at the highest level.  Recently the External Affairs Minister (EAM) S Jaishankar visited Australia from 03 to 07 November 2024, where he co-chaired the 15th Foreign Ministers’ Framework Dialogue (FMFD). He also had a meeting with Prime Minister Albanese. During the visit, EAM also inaugurated a new Consulate General of India, in Brisbane, which was announced by PM Modi in 2023 during his visit to Sydney. Australia has also enhanced its diplomatic presence in India, with the opening of a new Consulate in Bangalore in May 2023. These steps will further facilitate the already strong people-to-people ties between the two nations.  

In defence and security pillar also there have been significant upgrades in recent years. Both countries have started regular 2+2 meeting at the Foreign and Defence Ministers level. The second 2+2 Dialogue was held in 2023. With the conclusion of Arrangement Concerning Mutual Logistics Support (MLSA) in 2020 there has been significant progress in reciprocal defence information-sharing, and an increased interoperability between the armed forces of the two countries. India and Australia are now also focusing on enhacing defence industrial cooperation. 

India-Australia maritime cooperation, an important element of the CSP, has been closer than ever. Both countries are committed towards fostering practical maritime cooperation for a rules based maritime order in the Indo-Pacific. There have been regular naval interactions with bilateral and multilateral exercises, i.e. the AUSINDEX and the Malabar. The 28^th iteration of the Malabar exercise was hosted by India, with navies of the Quad countries participating, in October 2024, in Vishakhapatnam. Australia is also an important partner for India in the IPOI, taking lead on the maritime ecology pillar focused on cooperation for “preserving maritime ecology, reducing the impact of marine pollution, ensuring the sustainable use of marine resources, and reducing the impact of climate change”.[xvi]

In the economic realm, the two countries are looking forward to the conclusion of mutually beneficial Comprehensive Economic Cooperation Agreement (CECA) soon, seeking to build on the success of the ECTA which has boosted mutual trade by 40 percent in two years. During the Summit the two Prime Ministers noted the complementarities and collaborative potential between India's 'Make in India' and Australia's 'Future Made in Australia' initiatives, to create jobs and drive economic growth.[xvii] Cooperation as planned under REP and critical minerals will further boost the economic ties between the two countries. 

Australia and India are cooperating not only at the bilateral level but also at trilateral and quadrilateral formats. PM Albanese will be visiting India in 2025, for the fifth Quad Summit. They are also working closely at the multilateral level in regional architectures like ASEAN, and IORA, in line with their shared values and interests. 

Conclusion 

India-Australia relationship has come a long way. Two countries are now exploring newer areas of mutually beneficial cooperation. Once the CECA is concluded, it will provide further impetus to cooperation in areas like renewable energy and critical minerals. India and Australia are committed to a mulitipolar world and a multipolar Asia. Australia is looking to expand relationship and practical cooperation and collaboration in building regional architecture with India. From the perspective of relationship with India, there is a bipartisan commitment in Australia. India is also willing to collaborate with like-minded partners for a free, open, inclusive, transparent, and rules based order in the region. Clearly the trajectory of relationship looks very positive. Given the current geopolitical dynamics, with many complementarities and convergences, the two Indo-Pacific democracies and dynamic economies can work further with a progressive, practical and sustainable agenda of cooperation.

*****

*Dr. Pragya Pandey, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: The views expressed are personal.

Endnotes

[i] National Defence Strategy 2024, Commonwealth of Australia, P. 47, https://www.defence.gov.au/about/strategic-planning/2024-national-defence-strategy-2024-integrated-investment-program

[ii] Joint Statement: 2nd India-Australia Annual Summit, November 19, 2024, https://www.mea.gov.in/bilateral-documents.htm?dtl/38547/Joint_Statement_2nd_IndiaAustralia_Annual_Summit

[iii] Ibid. No 2

[iv] New India-Australia Renewable Energy Partnership launched, 20 November 2024, https://www.dcceew.gov.au/about/news/new-india-australia-renewable-energy-partnership-launched#:~:text=Both%20countries%20will%20work%20together,of%20the%20net%20zero%20transition.

[v] I.bid

[vi] Twitter, https://x.com/AlboMP/status/1858928678815809598

[vii] India-Australia Green Hydrogen Taskforce, Australian Department of Climate Change, Energy, Enviornment and Water https://www.dcceew.gov.au/climate-change/international-climate-action/international-partnerships/india-australia-green-hydrogen-taskforce#dcceew-main

[viii] The International Solar Alliance (ISA) Announces New Office Bearers for 2024 – 2026, 4 November 2024, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2070661

[ix] The role of critical minerals in clean energy transitions, https://www.iea.org/topics/critical-minerals

[x] China Leads Critical Minerals Production, https://www.statista.com/chart/32748/top-countries-processing-critical-minerals/

[xi] Milestone in India and Australia reach Critical Minerals Investment Partnership, 11 March 2023, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1905863

[xii] Barry O Farrell, How India and Australia have elevated their ties, 04 June 2020, https://www.hindustantimes.com/analysis/how-india-and-australia-have-elevated-their-ties/story-922R723zL8Dv67fLXqdffI.html

[xiii] List of documents announced/signed during India-Australia Virtual Summit, March 21, 2022, https://www.mea.gov.in/bilateral-documents.htm?dtl/35006/List_of_documents_announcedsigned_during_IndiaAustralia_Virtual_Summit

[xiv] I.bid. No 2

[xv] Milestone in India and Australia reach Critical Minerals Investment Partnership, 11 MAR 2023, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1905863

[xvi] I.bid No 2

[xvii] India, Australia firm up clean energy partnership, pushing mega trade pact, November 21, 2024, https://www.ibef.org/news/india-australia-firm-up-clean-energy-partnership-pushing-mega-trade-pact