India’s energy vow: ‘We will buy more of your good coal’
India says its demand for Australia’s “very good coal” will expand in coming years, and the approval of the Adani mine in Queensland has strengthened the trading relationship, as it urges the Morrison government to “plug in” to its surging consumer market.
As regional nations at the Pacific Island Forum in Tuvalu call on Australia to commit to a transition away from coal, India’s high commissioner, Ajay Gondane, said his country was relying on our coal to help fuel its development.
Dr Gondane said that despite efforts to bring down India’s reliance on coal-fired power — which generates about 60 per cent of his nation’s power — consumption of coal would continue to rise.
“That mix is not going to substantially change. The absolute number will be equal or more,” Dr Gondane said. “We will need all this coal. We
have a lot of coal. But … it’s not a clean coal. And the Australian coal is very good coal.”
Dr Gondane said the Adani mine cemented what would be “a very long-term relationship” trading coal between Australia and India. “Coal will be needed by us in any case. And if this was not available we would have to import from Indonesia or Mozambique or somewhere like that.
“So why not have a substantial basis in this relationship in the form of coal? We need clean coal for our power plants.”
As the Morrison government looks to diversify economic relationships to hedge against potential trade shocks with China, Dr Gondane called on investors to shed “outdated” perceptions and take advantage of a new dynamism sweeping his country. In a wide-ranging interview with The Australian to mark India’s 73rd anniversary of independence today, Dr Gondane revealed his country was finishing a report aimed at turbocharging engagement between the two nations.
It is a response to a 2016 Australian report by former Department of Foreign Affairs and Trade secretary Peter Varghese, who found there was “no market over the next 20 years which offers more growth opportunities for Australian business than India”.
Dr Gondane, who finishes his posting in October, said India’s 7 per cent annual growth rate and burgeoning youth market offered unmatched opportunities for Australian businesses. Describing Australia as an “energy superpower”, he said India would also need access to new, cleaner LNG.
Hopes are high for the bilateral relationship, with Scott Morrison looking to make an official visit to Delhi at the invitation of Indian counterpart Narendra Modi.
India, which like Australia has refused to sign up to China’s Belt and Road Initiative, shared “common thinking” with Australia due to the countries’ shared language, similar political systems, and historical links to Britain, Dr Gondane said. “Ultimately what we want to see is the triumph of democracy, the triumph of the rule of law, the triumph of the people,” he told The Australian. He described the nascent QUAD security bloc of India, Australia, the US and Japan — which analysts say India has stalled through lack of enthusiasm — as an “evolving mechanism”. “It will accelerate,” he said. “(But) we are focusing on our security in the Indian Ocean region.”
Dr Gondane said he had “no comments on China”, but drew a stark comparison between Beijing’s debt-led partnerships under the BRI, and his own country’s “transparent” development support to African nations.
He highlighted the Port of Hambantota in neighbouring Sri Lanka, which had to be signed over to Beijing on a 99-year lease after Sri Lanka failed to meet its debt repayments. “This is the difference between an open society and a closed society. We are open,” he said.
India is Australia’s fourth-largest trading partner, with exports of goods and services to the subcontinental giant valued at $21.1 billion last year, and two-way trade at $29.1bn. The Varghese report set out a plan, led by services exports such as education, to grow exports to India to about $45bn in 2035, and lift outward Australian investment in India from $10.3bn to more than $100bn by 2035.
Dr Gondane said India’s response to the Varghese report, by diplomat Anil Wadhwa, was set for release in October. He said the Wadhwa report would have a heavy focus on opportunities in areas like data management, artificial intelligence, hydrogen power, genetics, renewable energy and space technology.
He said final environmental approval for Indian-owned Adani was a “good signal” to Indian investors discouraged by the delays.