SARIC: the acronym Australia should revive with India

SINGAPORE, 15 AUGUST 2026 —

Australia Urged to Revive SARIC Program with India to Boost South Asian Energy, Trade Ties

The original SARIC, a A$32 million (RM96 million) initiative funded by Australia and implemented with the World Bank and International Finance Corporation (IFC), operated from 2019 to 2024 across Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. Its goal was to prepare bankable infrastructure projects in transport and energy by conducting feasibility studies, designing revenue models and training officials.

A review by Australia’s Department of Foreign Affairs and Trade (DFAT) found SARIC helped unlock US$8 billion in World Bank programs and supported the US$1 billion ACCESS transport initiative. In Bhutan, it assisted preparatory work for the proposed Dorjilung hydropower project, which seeks US$1.2–1.5 billion in consortium financing. It also enabled power-sector executives from Bangladesh, Bhutan, India and Nepal to identify investments for a more integrated electricity market.

The program’s success highlights Australia’s potential to play a catalytic role in South Asia by leveraging India’s central position in the region’s energy and transport networks. India, South Asia’s largest economy, serves as a physical and economic hub connecting power and transport systems across the subcontinent.

Regional Integration Gains Momentum Intraregional trade in South Asia remains at just 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, according to the Lowy Institute. In 2024, Nepal began exporting 40 megawatts of hydropower to Bangladesh through the Indian grid, demonstrating the feasibility of cross-border electricity trade.

The analysis argues that Australia should launch a second phase of SARIC, placing India at the center of a regional strategy. This would complement existing bilateral initiatives such as the Australia-India Renewable Energy Partnership, which covers solar supply chains, hydrogen, storage, investment and workforce development, as well as Australia’s 2024–29 South Asia development plan.

A renewed SARIC could establish an India-anchored project-preparation window, where governments nominate cross-border projects—starting with the Bangladesh-Bhutan-India-Nepal (BBIN) subregion. India would lead technical coordination with its grid and transport systems, while Australia funds feasibility studies, regulatory design and environmental safeguards. Multilateral banks like the World Bank and IFC could then finance projects that clear this preparation stage.

Malaysia’s Role in Regional Energy Transition While the SARIC initiative focuses on South Asia, its broader implications for regional energy security and connectivity could influence neighboring ASEAN markets, including Malaysia. As a key player in Southeast Asia’s energy transition, Malaysia has been expanding its renewable energy capacity and exploring cross-border electricity trade, including with Thailand and Singapore.

The revival of SARIC with India at its core could create opportunities for Malaysian companies in project development, grid integration and clean energy supply chains. Malaysian firms with expertise in hydropower, solar and grid management may find new avenues for collaboration in South Asia, particularly in BBIN countries.

Sector analysts note that Malaysia’s proximity to South Asia and its established trade links could position it as a potential logistics and financing hub for cross-border energy projects. However, details on specific Malaysian involvement in SARIC or related initiatives are not yet available.

Sector and Corporate Implications The original SARIC program’s success was partly attributed to the participation of Indian renewable energy firms like Suzlon, which installed 364 turbines with 764 megawatts of capacity across nine Australian wind farms by 2024. Suzlon’s entry into Australia in the early 2000s followed the expansion of India’s renewable energy sector, driven in part by industrialists like Tulsi Tanti, who invested in wind power to address high electricity costs in Gujarat.

This two-way flow of capital, technology and institutional learning underscores the potential for deeper Australia-India collaboration in clean energy. For Malaysian companies, the revival of SARIC could signal a broader shift toward regional energy integration, with opportunities in project financing, technology transfer and supply chain development.

Outlook: A Strategic Opportunity for Australia and India

The Lowy Institute analysis concludes that Australia does not need to create new funding mechanisms but should instead renew and expand SARIC as a tested instrument for regional integration. By placing India at the center of SARIC 2.0, Canberra can help transform a successful bilateral partnership into practical regional cooperation.

For Malaysia, the initiative could serve as a case study for how subregional energy markets in ASEAN and South Asia might evolve. While Malaysia is not directly involved in SARIC, its engagement in similar regional energy initiatives could enhance its role in Southeast Asia’s clean energy transition.

Details on the timing, funding or structure of a potential SARIC renewal are not yet available. Australia and India are expected to discuss regional cooperation under their Comprehensive Strategic Partnership in the coming months.

Related: Singapore