India and Australia have formalized a significant agreement aimed at fortifying clean energy supply chains and catalyzing investment in critical minerals. The deal, signed around May 20, 2024, under the Australia-India Economic Cooperation and Trade Agreement (ECTA), is set to create a more resilient pipeline for materials essential to the global energy transition.
At the heart of the agreement is a strategic push to promote investment in vital minerals such as lithium and cobalt, which are indispensable for manufacturing batteries, solar photovoltaic (PV) components, and other renewable technologies. The pact is specifically designed to facilitate investments by Indian corporations into Australia’s rich mining sector and encourage technical collaboration on advanced mining technologies between firms from both nations.
This bilateral cooperation is part of a broader international effort to diversify supply chains. It complements the Quad’s AU$50 million Clean Energy Supply Chains Diversification Program, which will launch its first funding round in November 2024. This initiative will support collaborative research and development among Australia, India, the United States, and Japan, focusing on solar PV, batteries, and electrolyzers to bolster India’s clean energy manufacturing ambitions.
According to analysis from the Institute for Energy Economics and Financial Analysis (IEEFA), pooling public funds could be a powerful enabler for such partnerships. By leveraging capital from national initiatives like Australia’s Future Made in Australia Act and India’s Production-Linked Incentive (PLI) schemes, the two countries could create a mutual investment fund. This shared capital pool would de-risk projects, attract substantial private investment, and ensure the stability required to scale up clean power generation in line with climate targets.
A successful blueprint for this model already exists. India’s quasi-sovereign National Investment and Infrastructure Fund (NIIF) has partnered with the Japan Bank of International Cooperation to launch a $600 million bilateral fund dedicated to financing low-carbon technology in India. A similar fund established between India and Australia could provide critical financing for capacity building, R&D, and low-carbon mining, solidifying the strategic partnership and accelerating their shared clean energy goals.
Sources for India and Australia Secure Supply Chain Deal to Boost Clean Energy Investment
- India-Australia Cooperation: Critical Minerals for Economic Security
- An India–Australia mineral partnership is critical for resilience
- Boosting India-Australia clean energy collaboration through pooling …
- IPEF Supply Chain Agreement – DFAT
- Australia Strengthens Strategic Partnership with India Through …
- Priority 3: Global supply chains | National Battery Strategy
- India, Australia sign deal to secure supply chains – PV Magazine
- Australia to open first round of clean energy supply chain initiative
