India’s trade deficit with Australia has declined sharply to USD 6.5 billion in FY2026, reflecting stronger bilateral trade and the positive impact of the India–Australia Economic Cooperation and Trade Agreement (ECTA), according to the latest Rubix Country Insights – Australia report released by Rubix Data Sciences. Published ahead of Prime Minister Narendra Modi’s visit to Australia, the report highlights the growing economic and strategic partnership between the two countries, supported by expanding trade, collaboration in critical minerals, energy security and defence.
According to the report, India’s imports from Australia have declined at a compound annual growth rate (CAGR) of 10 per cent, while exports have grown by 2 per cent annually over the past four years. Since January 2026, all Indian exports have enjoyed duty-free access to the Australian market under ECTA, further strengthening trade opportunities for Indian businesses.
The report notes that refined petroleum products account for 37 per cent of India’s exports to Australia, while coal represents 45 per cent of India’s imports from Australia, underlining the continued importance of energy trade. At the same time, cooperation is expanding into strategic sectors such as critical minerals, where Australia possesses 21 of the 49 minerals identified by India as essential for its clean energy and advanced manufacturing ambitions.
Australia’s economy is expected to remain resilient despite global uncertainties. The report projects the country’s GDP to increase from USD 1.84 trillion in 2024 to USD 2.29 trillion by 2028. Economic growth is forecast at 2 per cent in 2026 before moderating to 1.7 per cent in 2027 and recovering to 1.9 per cent in 2028. Inflation stood at 4 per cent in May 2026, while the Reserve Bank of Australia has maintained a cash rate of 4.35 per cent following three rate hikes during the year.
Australia’s goods trade surplus has narrowed from USD 97 billion in 2021 to USD 47 billion in 2025 as imports have grown faster than exports. China continues to be Australia’s largest trading partner, while iron ore, coal, natural gas and gold remain its leading export commodities.
The report also points to rising cooperation between India and Australia in defence, including the first Australia–India Defence Ministers’ Dialogue in 2025 and a Mutual Submarine Rescue Arrangement. It further highlights Australia’s focus on attracting investment through incentives for critical minerals, hydrogen and clean energy, while maintaining its AAA sovereign credit rating with a stable outlook.
Commenting on the findings, Tushar Bhaskar, President of Rubix Data Sciences, said Australia’s rich reserves of critical minerals make the partnership increasingly significant for India’s clean energy transition and semiconductor manufacturing plans. He noted that long-term supply security in these minerals could become an even more important pillar of the bilateral relationship than trade deficit figures alone.
Founded by experienced risk professionals, Rubix Data Sciences provides credit-risk management, supply-chain monitoring and compliance solutions for businesses in India and international markets. The company is also India’s first Validation Agent for the Legal Entity Identifier (LEI), accredited by GLEIF, Switzerland.
