Australia and India both stand to gain from the promise of expanding trade in lithium resources, Canberra's envoy here Barry O'Farrell on Thursday said, noting that lithium metal-based battery technologies will form the key component of the roll-out of electric and hybrid vehicles.

O'Farrell said in view of the need for Australia to diversify and strengthen its supply chains, and in recognition of India's drive toward self-sufficiency and the "truly remarkable" growth of its new economy sectors, the timing couldn't be better for lithium-related trade and investment.

Addressing a session of the Indo-Australian Chamber of Commerce on 'Lithium: Powering a New Australia-India Partnership', he said both countries stand to gain from the promise of expanding trade in lithium resources.

"Lithium metal-based battery technologies will form the key component of the push for the roll-out of EV and hybrid vehicle, and Australia and India both stand to gain from the promise of expanding trade in lithium resources," O'Farrell said.

Noting that Australia is a reliable and cost-competitive supplier of resource and energy commodities, he said the Australian government is fully committed to driving strong outcomes on lithium trade and investment, and on critical minerals more broadly.

"Australia's resource endowment and our mining capabilities and expertise well place us to support Prime Minister (Narendra) Modi's ambitions around development of India's new economy sectors," he said.

He said this trade in lithium has the backing of the highest levels of leadership.

Noting that COVID-19 has impacted both the Australian and the Indian economies adversely, O'Farrell said it also provides the impetus to develop more resilient and robust supply chains as well as to collaborate in new areas.

"The Australian government is fully committed to driving strong outcomes on lithium trade and investment, and on critical minerals more broadly," he said.