Malcolm Turnbull has assured the Indian billionaire hoping to build Australia’s largest coal mine in Queensland, Gautam Adani, that native title issues will not stop the $16bn project.

The prime minister, who is halfway through a four-day visit to India, also confirmed the Adani Group would seek a $1bn government loan to fund a rail line for the Carmichael mine project, but said Adani understood the request would be independently assessed.

Earlier in the day, Barnaby Joyce said the $1bn loan from the Northern Australia Infrastructure Facility was a “tipping point” issue for Adani, defending the subsidised loan for a railway line from the mine to the port.

Turnbull on Tuesday refused to answer whether he considered the loan was a tipping point which would make or break the project.

“Mr Adani in our discussion simply noted his company expects to make an application to the Northern Australia Infrastructure fund on the basis that we have described several times,” he said.

“But that has got an independent board, it will assess the application on its merits and it is obviously going to be dependent on there being other funding as well from the private sector from external sources to support the railway line. There is no new news on Adani and the railway project. They are entitled to make an application to the Northern Australia Infrastructure fund, they expect to do so and it will be assessed scrupulously and independently.”

The prime minister is understood to have assured Adani that a recent native title case in the federal court, which has thrown an obstacle in the way of the project, would be overcome when parliament resumes in May.

The Coalition has already drafted legislation to bypass the native title decision, which Labor says it supports in principle.



“Mr Adani noted this is an issue for his development but frankly it’s an issue for just about every development in Australia where native title issues are involved,” Turnbull said.

“It’s an issue for the native title owners as well because plainly you’ve got to be able to reach agreements to get the development to ensure native title owners, first Australians, get the economic returns and the advancement that they deserve and we all aspire for them to have.”

The Adani board is expected to decide whether to approve the controversial project as early as May.

Turnbull had a lengthy meeting with the Indian prime minister, Narendra Modi, on Monday night and the pair appeared to have struck a personal rapport, sharing selfies during a ride on Delhi’s metro system and jokes at an official dinner.

After signing six agreements, including one pledging closer cooperation against terrorism, Modi quipped that he was “glad that our decisions are not subject to the DRS review system”. Use of cricket’s controversial “third umpire” was a flashpoint in the recent four-match test between the two nations that India took out in Dharamsala last month.

Modi said he hoped Turnbull’s visit to the south Asian giant had been “as productive as it has been for Steven Smith’s batting, the other Australian captain”.

But despite the goodwill and burgeoning security ties between the countries, Turnbull has conceded a free-trade agreement is still years away. Successive deadlines for the deal, which was a major priority of the Tony Abbott government, passed in 2015 and 2016.

Turnbull said on Tuesday the Indian government had “not been as enthusiastic about [the agreement] as we would have liked”.

In a joint statement, the two leaders said they “reaffirmed their commitment” to the negotiations but stressed any deal would need to be “commercially meaningful”.

Mihir Sharma, a senior fellow at the Delhi-based Observer Research Foundation, said India was increasingly determined to protect its agricultural sector. “Australia, of course, is a big exporter of agricultural products. Sectors such as dairy farming are politically powerful and sensitive in India, and a government dependent on rural votes is reluctant to open them up,” he said.

Australia too was “unwilling to move forward on liberalising trade in services, particularly what is called ‘Mode 4’ trade, which might involve the temporary movement of people”.

Sharma said the Indian government was less willing to embrace free trade than in the past because large, inefficient sectors, such as the country’s state-owned airline, had proved difficult to reform.

“Hopes that [Indian] industry would be able to transform itself and become more competitive have been belied by recent experience,” he said. “The government is partly responsible, because this failure on the part of Indian business is a consequence of stultifying, archaic regulations. But either way, there is a strong temptation to just try and focus on developing India’s vast home market.”