Hormuz crisis: Australian LNG to India will surge, says Australian High Commissioner

Amid the global energy shortage triggered by the West Asia crisis and tensions around the Strait of Hormuz, enhanced LNG supplies from Australia could become a viable alternative to bridge India’s energy demand-supply gap, Australian High Commissioner to India Philip Green has said.

In an exclusive interaction with The Hindu in Vijayawada, Mr. Green said Australia’s proximity to India’s east coast and a crisis-free maritime route make Australian LNG well suited to support eastern India’s growing energy needs and green steel production.

At present, most LNG used for industrial and domestic needs in India comes from Middle Eastern countries through ports on India’s west coast.

“I can see a future where Australia increases LNG supplies to India,” Mr. Green said, noting that Australia’s major gas fields are located across the Indian Ocean from India’s southern State, Andhra Pradesh. While LNG cargoes from Australia to India have already begun, supplies could become “much more substantial” in the future, particularly for eastern India.

He added that maritime routes between Australia and India remain free and supply chains intact. Australia’s metallurgical coal exports for Indian steelmaking and imports of processed petroleum products from India are continuing and uninterrupted. Mr. Green said Australia currently exports LNG mainly to East Asian markets such as Japan, Korea and Singapore, and the Indian Ocean route offers India a supply chain free from strategic choke points.

ECTA and surge in Indian exports

Trade between India and Australia is growing strongly and is expected to expand further, according to Mr. Green. Indian exports to Australia have grown by 200% in the last five years, compared to 40% growth in exports to the rest of the world.

“India is profiting five times more in trade with Australia than with the rest of the world,” Mr. Green said. Since the implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA), Indian textile exports to Australia have risen 25%, agricultural exports 50%, and car exports 85%.

Lithium and Copper from Australia

Australia is also aiming to play a major role in supplying critical minerals such as lithium and copper for the clean energy sector. The country produces nearly half of the world’s lithium and already exports considerable quantities of copper to India.

Mr. Green said India’s growing EV and battery industries will require much larger lithium supplies, making Australia a natural partner. Australia is working with Indian government agencies and companies to build a direct lithium supply chain, including investments and offtake agreements in Australian lithium mines.

He added that India must remain proactive in securing Australian lithium amid rising global competition from Europe, North America and East Asia. “Indian consumers need to be active and hungry in a competitive global market looking to source more Australian lithium,” he said.