Australia's trade deal with India went into effect last December and has already led to a significant reduction in tariffs for both countries. Soon after the agreement was implemented, Australian exports worth approximately 2.5 billion Australian dollars were subject to lower tariffs when entering India. Australia’s minister for trade and tourism acknowledged the success of the trade deal. India and Australia are currently negotiating a more extensive comprehensive economic cooperation agreement aimed at strengthening economic trade and trade relations.

In 2020, the two-way trade between countries was valued at less than 25 billion USD, but India’s commerce ministry stated the goal to increase to about 100 billion USD within the next five years. To encourage this, Australia is promoting appealing investment opportunities in its mining sector to Indian businesses, particularly in mining crucial minerals like lithium that have become highly valuable due to their use in batteries. Australia is home to some of the largest lithium, nickel, cobalt, and other metal reserves, which are being used to create future batteries that can power electric vehicles and serve as an alternative to diesel generators for backup power supply.

Due to its small population and lack of significant capital, Australia has traditionally relied on foreign investment to optimise its mining industry. While the country has been a major exporter of coal and iron ore, the mining of critical minerals like lithium and other materials necessary for the transition from fossil fuels to renewable energy sources requires larger investments due to the smaller size and greater depth of their mines. As a result, Australia is seeking investment from Indian companies to help finance the extraction of these materials.

Although there are already Indian companies investing in Australia, including in the mining industry, Australia believes there is potential for greater investment from India. India has also committed to decarbonisation, and Australia is fortunate to have significant reserves of critical minerals needed for renewable energy production. Previously a fossil fuel superpower, Australia now aspires to become a renewable superpower and seeks partners, such as Indian companies, to help achieve this goal.

Australia is open to incentivising Indian companies interested in investing in the mining sector and is willing to discuss this possibility. Additionally, India is interested in greater access to Australia’s labour markets and is open to considering this as well.

The success of the recently signed trade pact between India and Australia has opened up new opportunities for deeper economic engagement between the two countries. Australia’s Minister of Trade and Investment is seeking greater access to India’s agricultural market, which has the potential to benefit both countries. Australia is keen to attract more Indian investments in its mining sector, the major contributor to the country’s economy. As India continues to pursue its ambitious economic agenda, the partnership between the two countries can play an important role in facilitating growth and development. With shared values and interests, India and Australia are well-positioned to build a dynamic and mutually beneficial relationship.