The defence outlook of major countries is fast changing amid the Covid-19 crisis and China’s increasingly coercive military posturing in the Indo-Pacific. Japan’s changing perspective on a first-strike capability ^[1], Australia’s 2020 defence strategic update ^[2], and India’s crafting of a comprehensive strategic partnership ^[3] with Australia while purchasing ^[4] the S-400 Triumf anti-missile system from Russia during the Galwan border clash with China are key indicators of how the Indo-Pacific powers are continuously changing their defence outlook. What scope do these developments create for the Australia–India defence partnership and where does India fit in Australia’s new defence strategy?

Australia’s strategic update and accompanying force structure plan ^[5] revisit the defence outlook and reassess the challenges Australia could face in its region in the near term and long term. The update’s focus on the Indo-Pacific is a response to China’s behaviour in the region—from the South and East China Seas to the Pacific Ocean and the Taiwan front. With Canberra’s changing posture, India could emerge as a stronger defence partner than before.

The aim to advance ‘military interoperability through defence exercises’ under India’s new mutual logistics support agreement ^[6] with Australia is a step in that direction. This arrangement gains strength from the two countries’ ongoing military modernisation, increasing the scope for defence and strategic cooperation. India is one of the leading importers of military equipment, but that hasn’t restricted it from planning to become self-reliant in arms and weapons manufacturing.

Prime Minister Narendra Modi’s ‘Atmanirbhar Bharat ^[7]’ (‘Self-reliant India’) strategy and ‘Make in India ^[8]’ initiatives aim to make India self-sufficient in a number of sectors, including national security and defence. Those programs could see Australia emerge as a stronger partner in India’s arms procurement and defence modernisation process. The Indian defence procurement policy ^[9] of 2016 encouraged joint development with original international equipment managers; the policy’s 2020 iteration follows similar lines while advocating for ‘Make in India’.

Closer collaborative ventures with Australian defence firms could boost India–Australia defence cooperation, especially in aerospace manufacturing, disaster relief, maritime security, shipbuilding, military infrastructure building and disruptive technology. Australia, too, is a net importer of defence equipment and plans to invest more than $200 billion ^[10] over the next 10 years in building defence capability, which it hopes will support export opportunities for indigenous cutting-edge technologies and equipment.

India should also tap into Australia’s competitive defence technology and cybersecurity training sectors. The cooperation arrangements ^[11] signed as part of the Australia–India comprehensive partnership include one on defence science and technology and another on cyber and cyber-enabled critical technology. In its 2020 strategic update, Australia has accorded immense importance to defence technology and cybersecurity due to the ever-expanding ‘threshold of traditional armed conflict ^[2] in what experts call the grey zone’. The Australian government recently announced ^[12] a $1.35 billion investment in enhancing cybersecurity capabilities.

While Australia’s defence export strategy ^[13] of 2018 did not identify India ^[14] as a close ally for export of its ‘sensitive technologies’, including India now as a major partner must become a necessity. Canberra’s strategic update should encourage Australia and India to cooperate in strategic thinking, meet grey-zone challenges, enhance their conventional capabilities and engage in stronger military-centric regional cooperation.

Australia and India had each long managed their relationship with China under an effective appeasement policy, but those strategies are undergoing serious revision.

Both countries have expressed concerns over China’s aggressive posturing in the South China Sea. An estimated two-thirds ^[15] of Australian exports and more than half of Indian trade ^[16] pass through the South China Sea, making it vital to their commercial interests. India and Australia ^[17] share a vision of a ‘free, open, inclusive and rules based Indo-Pacific region’ in which freedom of navigation and overflight, and peaceful and cooperative use of the seas, are upheld.

Cooperation on the South China Sea could be more thorough, however. Australia’s inclusion in the Malabar naval exercise with India, Japan and the US is vital in this regard. Australia’s participation in the exercise is emerging as an almost foregone conclusion, though no formal announcement has yet been made.

The partnership between Australia and India is no longer one-dimensional, and to be truly comprehensive it needs to have many layers. The Indian market might appear to be complex, but it is also ‘very fast moving ^[18]’, as Australia’s trade minister Simon Birmingham said recently. India is the fifth-largest export market for Australia and is ranked as its eighth-largest trading partner, yet two-way trade is still unimpressive at $30.3 billion in 2018–19.

Stronger defence cooperation could emerge out of stronger economic ties. The time has come for Australia to factor India much more seriously into its defence planning and to foster a stronger, market-oriented defence partnership.