Australia’s hopes of cushioning the blow from China’s cooling demand for iron ore by turning to India are, according to analyst Tarric Brooker, wishful at best. “The idea that India can replace China is simply not grounded in the data,” says Brooker, a Sydney-based economic commentator who tracks commodity markets and macro trends. “We’re talking about an iron ore demand gap so vast, it’s practically unbridgeable,” he wrote in the MacroBusiness daily newsletter.
For decades, China’s booming property sector and breakneck urban development have propped up demand for Australian iron ore. But that cycle appears to be unwinding. “So far, the hole left in China’s iron ore consumption by the dramatic decline in the residential property sector has been filled by steel exports and surging levels of infrastructure construction,” Brooker notes. “But resilience is not going to last forever.”
Iron ore prices have already slipped to their lowest since September 2024. And while China continues to lean on infrastructure projects to prop up demand, Brooker warns of deepening cracks in that strategy. “Declining starts in commercial real estate, rising trade barriers against Chinese steel exports, and local government debt woes all signal trouble,” he says.
It’s against this backdrop that Australian officials have turned to India with renewed enthusiasm. Prime Minister Anthony Albanese famously attended a rally for Indian Prime Minister Narendra Modi in Sydney in 2023, referring to him as his “dear friend” and “the boss.” The symbolism was loud, but the economic reality, says Brooker, is more subdued.
“In 2024, China imported 1.24 billion tonnes of iron ore,” he points out. “India imported just 6.75 million. That’s 0.54% of what China took in.” To put it more bluntly, Brooker says, “China imports more iron ore in two days than India does in an entire year.”
Part of the issue is structural. India produces most of its iron ore domestically and has long pursued policies geared towards self-sufficiency. “This strategy has only intensified under Modi’s government,” Brooker says. “India simply doesn’t import much iron ore—and isn’t going to start doing so in large volumes any time soon.”
And it’s not just iron ore. Brooker warns that Australian coal exporters face similar headwinds. “India’s Ministry of Coal projects that domestic coal production will rise by over 50% by 2029-30,” he says. “At the same time, the global push for decarbonisation is reshaping how steel is made.”
A report by the Institute for Energy Economics and Financial Analysis forecasts that by 2030, the share of steel production using traditional coking coal furnaces will fall from 92% to 70%. That shift could further chip away at demand for Australian coal, particularly from its largest buyers.
Even if India continues to grow industrially and adds to global commodity demand, Brooker argues that it won’t be enough to outweigh what’s being lost from China’s slowdown. “The net effect is likely to be negative for Australia,” he says.
Add to that the looming arrival of new supply. “The Simandou mega-mine in West Africa is expected to come online in 2026 and 2027,” Brooker adds. “That’s going to increase global iron ore supply and potentially drive prices down further, right when Australia needs prices to hold up.”
Australia’s long-standing reliance on selling raw materials to powerhouses like China has always carried a degree of risk. Now, those risks are coming into sharper focus. “We’ve built a commodity-export-reliant economy around China’s growth model,” Brooker says. “But that model is shifting—and we need to start asking the harder questions about what comes next.”
He doesn’t deny that India’s rise matters. “India’s growth will help, just not at the scale many in Canberra might be hoping for.” It’s a tough pill to swallow, especially for governments betting on a smooth transition from one Asian partner to another. But Brooker says clinging to easy narratives won’t change the hard numbers.
“Australia has to think beyond commodities. There’s no one-for-one swap waiting on the sidelines. China was a once-in-a-century boom. India is on a different path.”
And that’s the story Canberra will eventually have to face, no matter how many trade deals or rallies are held.
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📉#Australia can't replace #China's #iron ore demand with #India (1.24B vs 6.75M tonnes). ⚠️China's slowdown & Simandou mine's 2026 launch threaten prices. 🇮🇳India's self-sufficiency limits import growth. #TheIndianSun @AvidCommentator @AlboMPhttps://t.co/53ShbwHxOM
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