Australia and India’s defence relationship has undergone a remarkable transformation over the past generation. Where once there was little dialogue, today the two nations are engaged across almost every domain of defence cooperation, analysed "The Australian" web portal.

The central challenge for Canberra is not whether the partnership will deepen, but whether Australia can act with sufficient urgency to seize the scale of opportunity that India now presents.

The inaugural Australia-India Defence Ministers’ Dialogue in October last year marked a significant milestone. Both governments committed to holding annual ministerial dialogues, expanding joint exercises across multiple domains, enhancing information sharing, and establishing the first Indian position at the Australian Defence Force Academy.

They also signed a mutual submarine rescue arrangement, while India offered its shipyards for maintenance, repair and overhaul of Royal Australian Navy vessels operating in the Indian Ocean. Such rapid progress is not accidental; it reflects the compelling strategic logic driving both nations closer together.

Australia’s 2026 National Defence Strategy, released last month, explicitly identifies the Northeast Indian Ocean as part of Australia’s primary area of military interest. It describes India as a “top-tier security partner” and the most “important defence partner” in that region.

This assessment is rooted in the growing visibility of China’s military build-up in the Indian Ocean. The People’s Liberation Army Navy’s submarines patrol these waters, Chinese research vessels survey the seabed, and Beijing’s strategic reach extends well beyond the Malacca Strait.

With Australia’s trade routes running through this geography, and both nations being resident maritime powers, the shared threat creates practical opportunities for deeper cooperation.

Maritime security has become the most advanced area of collaboration. Australian and Indian maritime patrol aircraft now conduct joint anti-submarine warfare activities, while negotiations are underway for an agreement on air-to-air refuelling.

The Joint Maritime Security Collaboration Roadmap, discussed at the October meeting, points towards sustained cooperation across the Indo-Pacific maritime domain.

Cyber security, though less developed, offers significant potential. India is the most targeted country for cyber-attacks globally, while Australia experiences alerts every six minutes.

Both nations face persistent intrusions against critical infrastructure and have invested heavily in sovereign cyber capabilities—Australia through REDSPICE and India through its expanding cyber command structures. Information sharing, joint exercises, and submarine cable security are areas where both democracies could achieve far more.

Defence industry cooperation represents the most consequential and complex opportunity. India’s defence-industrial sector has evolved from a procurement bureaucracy into a dynamic ecosystem of public shipyards, major manufacturers, start-ups, and a state-led Make in India policy that prioritises technology transfer, local production, and indigenisation.

For Australian firms, this terrain is unfamiliar. Australia’s defence industry is small, export-oriented, and accustomed to selling finished capabilities rather than co-developing within another country’s industrial framework.

A top-down approach from both governments will be essential to unlock this potential. As highlighted in a recent Australia India Institute report, this requires supporting smaller Australian companies to engage, clarity from India on priority areas, and demonstrable commitment through procurement of products made by Australia-India joint ventures.

India’s longstanding policy of strategic autonomy continues to shape its partnerships. Russia remains a significant, though declining, supplier of defence equipment, and India has not aligned with Western sanctions on Moscow following the war in Ukraine.

Substantive ties with Iran also persist. These relationships influence the scope of intelligence sharing, sensitive technology transfers, and the broader political context, particularly in relation to Canberra’s ties with Washington and London.

Yet, while Australia deliberates, other nations are moving decisively. France has become India’s second-largest arms supplier after Russia, accounting for roughly one-third of India’s imports. Between 2020 and 2024, India received nearly double the French defence exports compared to the combined share delivered to the rest of the EU.

In April last year, France signed a $7.5 billion agreement to supply 26 Dassault Rafale Marine fighters to the Indian Navy. Beyond procurement, the India-France Defence Industrial Roadmap integrates innovation ecosystems, linking investors, incubators, start-ups, and research institutions for long-term co-development.

Germany is following a similar trajectory. In April this year, Berlin and New Delhi signed a Defence Industrial Roadmap, with an $8 billion agreement expected for six advanced submarines to be built at Mazagon Dock Shipbuilders Limited in partnership with Thyssenkrupp Marine Systems.

Germany has eased export controls for India in high-value areas such as electronic warfare, sensors, and avionics, signalling readiness for deeper industrial integration.

This aligns with Germany’s wider strategic recalibration following Russia’s invasion of Ukraine and uncertainty over US commitments. Berlin’s 2024 “Focus on India” policy paper identifies India as a priority partner for joint production and coordinated responses to instability.

With defence spending reaching $88 billion in 2024, Germany is positioning itself as a hub for European defence production, increasingly reliant on partnerships with large manufacturing bases like India. Neither France nor Germany appears deterred by India’s ties with Moscow or Tehran; both have accepted India’s industrial framework and secured long-term positions.

For Australia, the strategic case is undeniable. Geography dictates it, the National Defence Strategy formalises it, and ministerial agreements reinforce it. China’s expanding presence in the Indian Ocean ensures the trajectory will not reverse.

The challenge lies in implementation. Australia possesses comparative advantages in maritime security, cyber, and defence industry—areas aligned with Indian priorities—but must navigate legitimate concerns about India’s external partnerships and industrial demands.

These factors will not disappear, but neither should they delay action. Strategic windows narrow quickly, and industrial ecosystems are difficult to penetrate once established. If Australia fails to act with urgency, it risks missing opportunities that others are already securing.

The Australian Report