India-Australia minerals deal: Dig deeper
Key Findings
The proposed India-Australia critical minerals corridor comes at a time when minerals have become strategic assets central to clean energy, manufacturing and a country’s economic security.
The two countries have complementary strengths, but their trade remains limited and fragmented, with little integration across processing, manufacturing and recycling.
The corridor should focus on building value chains, from Australian resources to Indian manufacturing, supported by investment, technology co-development, skills and states-level partnerships.
The corridor’s success will depend on moving beyond diplomatic agreements to commercially viable projects, backed by demand certainty and deeper private-sector participation.
Prime Minister Narendra Modi’s recent visit to Australia marked an important step in bilateral cooperation with the announcement of an ‘Australia—India Partnership Cyber, Critical Technologies and Supply Chains’, including plans for a critical minerals corridor.
Lithium, nickel, cobalt, and rare earths are no longer just commodities. They are essential for electric vehicles (EVs), batteries, renewable energy, advanced manufacturing and economic security. As countries race to tighten control over strategic technologies and minerals, the opportunity to build trusted alternatives to concentrated supply chains may not remain open indefinitely.
The logic behind the cooperation is clear. Australia has abundant critical mineral resources, decades of mining expertise, and strong environmental and social governance (ESG) frameworks. India, meanwhile, is one of the world's fastest-growing centres of demand for these minerals, driven by expansion of EVs, battery and solar manufacturing, and renewable energy deployment.
Yet the trade relationship remains far smaller than the strategic opportunity.
In financial year (FY) 2024-2025, India imported 2.7 million tonnes of critical minerals worth USD12 billion (INR1.2 lakh crore), with Australia accounting for 6% of both. Its exports to India remain concentrated in copper ores and concentrates and nickel oxides and hydroxides, supplying 65% of the latter. However, despite being the world's largest lithium producer, it barely features in India's lithium imports.
Even when minerals move through global supply chains, much of the processing takes place elsewhere, including in China, Belgium, Finland and Germany.
Essentially, Australia has the resources; India has the demand. The missing link is an integrated value chain. The corridor should be more than another trade agreement. It should be an integrated industrial partnership connecting resources, capital, technology, processing, manufacturing, recycling and skills.
Let states drive the next phase
Deeper state-to-state cooperation could make the corridor more commercially relevant. Australian states like Western Australia, New South Wales, Queensland and the Northern Territory could partner with Indian states developing critical mineral processing and manufacturing ecosystems, particularly as India establishes rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
This could help match specific Australian projects with Indian industrial demand, align infrastructure and skills development, facilitate regulatory cooperation and connect governments, companies, universities and research institutions.
Technology co-development crucial
In technology, rather than following the old model of one country developing it and the other adopting it, the focus should shift towards co-development.
India and Australia should jointly address technological gaps in mineral refining, recycling, rare earth processing and next-generation battery materials through research partnerships involving companies from the outset, and pilot projects designed around real operating conditions and commercialisation.
The partnership could also create new value chains. Australia could expand lithium hydroxide and lithium oxide processing, while India develops complementary capabilities in cathode active materials and battery manufacturing — a more powerful model than simply shipping lithium ore.
Capital, not intent, will make the corridor work
Ultimately, financing will determine whether the corridor moves beyond political intent.
Processing and refining projects require large upfront investments, reliable feedstock, skilled labour and long periods before becoming commercially viable. Moreover, volatile mineral prices and uncertain demand further deter investment. Governments can help de-risk early projects through concessional and blended finance, loan guarantees and other forms of catalytic capital. Financing should also be closely linked to technology commercialisation.
The corridor will need skills, standards and circularity
Finally, the corridor should be built around trusted supply chains. Australia's strong ESG standards and sustainable mining practices can guide India.
A shortage of skills is one of the greatest constraints across the critical minerals value chain, particularly in advanced processing and refining. Workforce development must, therefore, be integrated into project planning early on. India already has an expanding network of centres of excellence and technical institutions, while Australia brings decades of operational expertise. Closer collaboration can help build the talent needed across emerging mining and processing hubs.
Circularity is another feature that should be built into the corridor. According to the International Energy Agency, recycling could reduce the need for new mining activity by 25–40% by 2050. Australia’s growing volumes of end-of-life batteries could be linked with India’s recycling capabilities, while recovering minerals from mine tailings, improving material efficiency and developing alternative technologies could reduce new mining.
The corridor should ultimately be judged not by how much ore it moves, but the value it creates.
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