India seeks critical minerals access and investment boost in free trade deal
India is seeking preferential access to Australia’s critical minerals and an investment boost from the nation’s super funds as it pitches a grand economic bargain under a new free trade deal.
India is seeking preferential access to Australia’s critical minerals and an investment boost from the nation’s super funds as it pitches a grand economic bargain between the countries under a new comprehensive free trade deal.
With Trade Minister Don Farrell and his Indian counterpart Piyush Goyal set to kickstart trade talks in Paris this week, India’s top diplomat in Australia said the countries had a chance to enmesh their economies as never before.
As the world reels from Donald Trump’s trade war, Indian high commissioner Gopal Baglay held out the prospect of greater access for Australian agricultural exports to India’s market of 1.4 billion consumers, on top of services, clean energy, and infrastructure deals.
Both countries are keen to upgrade the deal as a hedge against the economic turmoil sparked by Mr Trump’s tariff agenda, including his surprise announcement last week that he will jack up steel and aluminium duties from 25 per cent to 50 per cent.
Anthony Albanese on Sunday said the latest tariff increase unveiled by Mr Trump was “an act of economic self harm”, with the government to push for their removal.
“This is something that will just increase the cost for consumers in the United States, which is why it is an inappropriate action by the Trump Administration,” the Prime Minister said.
Mr Baglay said Australia’s vast $4 trillion superannuation sector stood to benefit from India’s surging economy with “game-changing” deals, including green energy opportunities under India’s ambitious 500MW renewables plan.
He said India – a like-minded democracy and member of the Quad security partnership – was looking for access to Australia’s raft of critical minerals incentive schemes, including the new $1bn-plus Minerals for Mates plan aimed at sweetening future Australia-US trade talks.
India was also determined to secure fresh opportunities for the country’s own services and IT sector in deals with Australia’s public and private sectors, Mr Bagley said, arguing the world was now a global workplace.
The high commissioner said there was “immense potential” for the two nations’ economic partnership, given India’s GDP growth was running at more than 6 per cent a year and the nation was set to overtake Germany to become the world’s third-biggest economy in just a few years.
“There is enormous significance to India’s story, which is unfolding, and we would very much like Australia to be a partner in that developing story, not just for now but in the decades to come,” Mr Baglay told The Australian.
“We would like Australia and India to be the powerhouse of economic growth in this region.”
The push comes ahead of a scheduled trip by Anthony Albanese to India later this year for a meeting of the Quad security dialogue, and a visit to the country this coming week by Defence Minister Richard Marles for talks on closer defence co-operation.
Australia and India signed a so-called “early harvest” free trade deal in 2022, which helped propel two-way trade from $19bn to $54bn in 2023-24.
“It will be a stronger agreement. It will be a more robust, more inclusive agreement,” Mr Baglay said.
“If you take two examples – clean energy and human resources – there’s a lot that we can work on together and potentially leverage each other’s strengths.”
Critical minerals are vital for renewable energy and military technology, two of India’s fastest-growing economic sectors.
Australia is home to some of the largest critical minerals deposits on Earth, including lithium, cobalt and all 17 rare earth elements, giving India a chance to be free of China’s dominance in the sector.
Mr Baglay said critical minerals would be “a very significant part” of the upcoming FTA, building on a 2020 memorandum of understanding between the countries to strengthen co-operation in the vital sector.
He said more work needed to be done to clear the way for critical minerals deals “so bigger Indian players can come and partner and invest in the whole value chain”.
“Critical minerals is an important area of our discussions related to trade, and it is self-evident because it is enormously important for the clean-energy ambitions that Australia has; that we have. So in my view, a partnership in this regard is inevitable,” he said.
A new critical minerals deal between the countries would also help to strengthen the nations’ security ties. While India is a founding member of the non-aligned movement and maintains economic and defence ties with Russia, it is considered a vital partner in the pushback by Western nations against China.
On agriculture, Mr Baglay said more Australian foods and wines were now available on Indian supermarket shelves thanks to the countries’ 2022 trade deal. He left the door open to tariff cuts for Australian chickpeas and lentils, a key protein source for the country’s vast vegetarian population.
Imports of Australian-grown pulses to India are periodically restricted depending on the country’s growing season.
Mr Baglay said he believed the hoped-for comprehensive agreement deal could be struck quickly, noting India had clinched a free-trade agreement with the UK.
Senator Farrell, who will attend the OECD Ministerial Council meeting with Mr Goyal in Paris this week, was also optimistic at the prospects for a deal.
“We got very close to an agreement before the election was called and we will now quickly restart those discussions,” he said.
“We are happy to talk about anything India wants to put on the table. They are a good ally, a fellow democracy, and now have the largest population in the world with a fast-growing middle class.”
Australia will host an internal meeting of World Trade Organisation members on the sidelines of the OECD meeting to discuss the fallout from Mr Trump’s wildly unpredictable tariff policies and the prospects for WTO reform.
Senator Farrell will also meet with EU counterpart Maros Sefcovic to advance Australia-EU trade talks, and is hoping to have discussions with US Trade Representative Jamieson Greer.
Senator Farrell will also host a meeting of 20 agricultural producer nations known as the Cairns Group on reforms to level the playing field in the global agriculture trade.
The Australia-India negotiations come as India and Pakistan maintain an uneasy truce after a four-day conflict between the nuclear-armed neighbours last month. India launched missile and drone strikes on Pakistan in response to an attack on Indian tourists in Kashmir that left 25 people dead. Pakistan responded by launching strikes on Indian targets.
Mr Baglay called on the Pakistani government to “root out terrorism, to root out state support for terrorism”. Pakistan has countered by accusing India of state-sponsored terrorism on its soil.
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