India is indispensable to closing that gap. It is South Asia’s largest economy and the physical hinge for many of its power and transport networks. In 2024, Nepal began exporting 40 megawatts of hydropower to Bangladesh through the Indian grid (Opens in new window). The transaction was small, but India’s facilitation proved that third-country electricity trade can work.
Canberra should launch a second phase, or a successor program, that places India at the centre of SARIC’s regional strategy. This would complement the bilateral Renewable Energy Partnership, which already covers solar supply chains, hydrogen, storage, investment and workforce skills, and Australia’s 2024–29 South Asia development plan (Opens in new window).
A renewed SARIC should establish an India-anchored project-preparation window. Participating governments could nominate cross-border projects, beginning with the Bangladesh-Bhutan-India-Nepal subregion. India could lead technical coordination with its grid and transport systems. Australia could fund feasibility studies, regulatory design, procurement frameworks and environmental and social safeguards. The World Bank, IFC and other development banks could then finance projects that pass this preparation stage.
Electricity trading should be the first priority. SARIC could help develop compatible grid rules, bankable power-purchase agreements, shared storage and balancing arrangements, and transmission projects that connect hydropower in Bhutan and Nepal with demand in India and Bangladesh. It could later support transport corridors for clean-energy equipment around the Bay of Bengal.
India’s leadership would be strengthened, not diminished, by joint ownership. New Delhi could convene the platform while each participating government helps select and govern projects. This would combine India’s scale and regional knowledge with Australia’s project-preparation expertise and the financing reach of multilateral institutions.
Australia does not need another grand infrastructure fund before it has a credible pipeline. It needs to renew a tested instrument. India can provide the scale, geography and leadership, while SARIC can provide the institutional machinery. Together, it can turn a successful bilateral partnership into practical regional integration.
Australia should stop seeing India only as a bilateral partner and start treating it as the central node in South Asia’s regional future.
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