SARIC: the acronym Australia should revive with India

In 1995, frustrated by high electricity costs at his family’s textile business in Gujarat, an Indian businessman invested in two wind turbines and soon founded Suzlon. Less than a decade later, the company entered Australia. It went on to install 364 turbines with about 764 megawatts of capacity across nine Australian wind farms. By 2024, Austrade reported that it held 17% of the market (Opens in new window).

At first glance, Tulsi Tanti’s story belongs to Indian industrial history, but it is more than an appealing corporate story. It shows that the clean-energy relationship can run both ways: capital, technology and institutional learning can move between India and Australia.

Under Australia’s Comprehensive Strategic Partnership with New Delhi, bilateral trade, defence ties, and renewable energy collaborations have surged to record heights. Yet, to truly unlock the economic potential of this partnership, Canberra must look through the India lens and see the vibrant, fast-growing neighbourhood around it.

India is the economic heavyweight and geographic centrepiece of South Asia. By placing a relationship with India at the heart of regional foreign policy, Australia has a rare opportunity to help build a more connected, resilient, and integrated South Asian neighbourhood.

The institutional blueprint already exists in the South Asia Regional Infrastructure Connectivity program, or SARIC. Funded by Australia and delivered with the World Bank and International Finance Corporation, SARIC was a A$32 million program operating from 2019 to 2024 across Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. Its purpose was practical: help governments prepare transport and energy projects capable of attracting public or private finance, while training the officials and professionals responsible for delivering them.

That focus addressed one of South Asia’s most persistent problems. The region does not lack infrastructure ambitions. It lacks enough projects with credible feasibility studies, agreed revenue models, workable safeguards and clear allocations of risk. SARIC used relatively modest Australian funding to improve this preparatory work.

The results illustrate the leverage of this approach. A DFAT review (Opens in new window) found that SARIC informed US$8 billion in World Bank programs and helped underpin the US$1 billion ACCESS transport and trade initiative. In Bhutan, it supported preparatory work for the proposed Dorjilung hydropower project, for which the government sought US$1.2–1.5 billion in consortium financing. It also enabled power-sector executives from Bangladesh, Bhutan, India and Nepal to identify investments needed for a more integrated electricity market.

SARIC’s initial phase has ended, but its underlying task has become more urgent. Intraregional trade remains only one-third of its potential, leaving an estimated US$44 billion annual gap. A common electricity market linking Bangladesh, Bhutan, India and Nepal could save US$17 billion in capital costs (Opens in new window).

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.