Why India, Australia need to bolster AI ties

New Delhi: Australia is building data centre capacity at a pace that exceeds its demand, while India’s AI expansion is progressing at a rapid pace that cannot be matched by domestic capacity which creates a natural complementarity that the two countries can tap, according to an article published by the Lowy Institute.

The Australian National AI Plan, released in December 2025, presents Australia as the Indo-Pacific’s home for trusted digital infrastructure, citing more than A$100 billion in forecast data centre investment alongside an abundant renewable resource.

Australia is looking at being a regional AI hub with an over A$100 billion in forecast data centre investment along with abundant renewable energy. India offers a suitable opportunity with its fast-growing demand for AI, states the article.

It highlights that a week before Prime Minister Narendra Modi’s visit to Melbourne in July, India and Japan issued a joint statement on AI, which covers data centres, compute and semiconductors. This approach can be adopted in the case of an Australia-India agreement as well.

“Australia still provides a better case – with surplus land, renewable energy, and a data centre sector still drawing about 2 per cent of national electricity. Energy ministers agreed this year that new data centres must fund additional renewable generation to cover what they consume. Underwriting new generation is financeable only against long-term contracted demand, which could be supplied through a substantial Indian commitment,” the article observes.

It also opines that Australia is a far more reliable partner than the US when it comes to AI as far as India is concerned.

The article states that the meeting between PM Modi and his Australian counterpart Anthony Albanese in July 2026 launched the Australia-India Partnership on Cyber, Critical Technologies and Supply Chains, organised across five pillars and overseen at deputy national security adviser level.

AI appears as only one of five technologies inside those pillars. However, what is required is a dedicated mechanism for AI to achieve better results as is the case in the agreement with Japan, says the article.

It points out that the most valuable early project for Australia and India would cost comparatively little. AI models are still evaluated overwhelmingly in English, so a model that performs respectably in English can fail in Indian languages like Hindi, Tamil or Bengali. India can develop the standard test suites to take care of the problem.

Shared benchmarks for multilingual and Indic-language models would be technically achievable and useful to both governments, and no commercial developer has much reason to fund them.

“An annual India-Australia AI dialogue, carved out of the critical technology pillar and given standing of its own, would supply what is missing, with the language benchmarks as a first task and the harder negotiation over compute access as its eventual purpose,” the article observes.

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