A new report by the Lowy Institute, an Australia-based policy think tank, has urged Canberra to place India at the centre of its South Asia regional strategy — arguing that doing so would unlock deeper trade, energy, and infrastructure integration across the subcontinent. The report, released ahead of India's Independence Day on 14 August, calls for a second phase of the Australia-India Comprehensive Strategic Partnership that complements the existing bilateral Renewable Energy Partnership.

The Case for an India-Anchored Strategy

The Lowy Institute describes India as the economic heavyweight and geographic centrepiece of South Asia, urging Australia to treat New Delhi not merely as a bilateral partner but as the central node in the region's infrastructure future. The report argues that the successor programme should place India at the heart of the South Asia Regional Infrastructure Connectivity (SARIC) initiative, driving gains across solar supply chains, hydrogen, energy storage, investment, and workforce skills.

"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," the report stated.

What SARIC Is and What It Achieved

Funded by Australia and delivered in partnership with the World Bank and the International Finance Corporation (IFC), SARIC was a $32 million (Australian dollar) programme that operated from 2019 to 2024 across Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. It helped governments prepare transport and energy projects capable of attracting public or private finance, and ran professional training for project implementation.

The think tank's position is clear: Australia does not need a new grand infrastructure fund — it needs to renew a tested instrument. The report noted, "India can provide the scale, geography and leadership, while SARIC can provide the institutional machinery."

Proposed Division of Roles

Under the proposed framework, India would lead technical coordination, leveraging its grid and transport systems, while Australia would fund feasibility studies, regulatory design, procurement frameworks, and environmental and social safeguards. Following the project preparation stage, the World Bank, IFC, and other multilateral development banks would step in to finance approved projects.

The report also highlighted electricity trading as a priority area, suggesting that a renewed SARIC could help develop compatible grid rules, bankable power-purchase agreements, and shared storage and balancing arrangements across the region. It could subsequently support transport corridors for clean-energy equipment around the Bay of Bengal.

Bilateral Ties as the Foundation

Australia's Comprehensive Strategic Partnership with India has already elevated bilateral trade, defence ties, and renewable energy collaboration to record levels. The Lowy Institute argues that this strong bilateral foundation makes India the natural anchor for any broader regional architecture — a logic that aligns with India's own ambitions to lead South Asia's clean energy transition.

Whether Canberra acts on the recommendation will depend on political will and budget priorities, but the report gives Australia's policymakers a concrete, phased roadmap to build on an instrument that has already demonstrated results on the ground.