Why Australia and India Must Turn Political Will into Factory-Floor Reality
Authors: Pradeep S Mehta, Purushendra Singh and Anjali Shekhawat
On 3 June 2025, the Australian Deputy Prime Minister and Defence Minister Richard Marles visited New Delhi with the aim of boosting security cooperation with South and Southeast Asia. A few months later, on 8 October 2025, India’s Defence Minister Shri Rajnath Singh touched-down in Sydney to co-chair the inaugural Australia-India Defence Industry Roundtable. His visit resulted in three landmark agreements between the Australian and Indian governments covering areas of information sharing, the maritime domain, and joint activities. This level of commitment suggests that the leadership of both countries are committed to deepening defence industry collaboration to address regional security challenges.
The Australia-India defence relationship has seen remarkable progress in recent years, driven by the will of successive prime ministers, and culminating in the 2020 Comprehensive Strategic Partnership. Yet, security cannot be sustained by government leaders alone. Unless we sow the seeds of self-sustaining, ground-up security cooperation between our nations, the next decade will squander the advances made to date. To ensure enduring collaboration, institutions must recognise the value of tackling shared challenges together; making defence ties a robust pillar of the bilateral relationship.
The Indo-Pacific’s Inflection Point
In 2024, the Indo-Pacific defence market accounted for 22 percent of global expenditures and it is projected to reach US$644 billion by 2030.[1] India's defence budget for 2025-26 stands at INR 6,81,210 crores (US$78.57 billion), a 9.5 percent increase over the previous year. Of this, 75% is earmarked for domestic procurement and 26.4% for new acquisitions. This rate of expenditure reflects India's push towards indigenization and creates opportunities for foreign partners in manufacturing and technology transfer.[2] It also underscores the economic rationale for deeper Australia-India collaboration. Australia's decade-long US$200 billion defence investment programs align structurally with India's capabilities. Further, Australia's Defence Export Strategy acknowledges that domestic demand alone cannot sustain Australian defence industry.[3]
The Australia-India relationship has undergone a remarkable transformation. It is now underpinned by the 2020 Comprehensive Strategic Partnership (CSP) and reinforced by shared interests in a free, open, and rules-based Indo-Pacific. As both nations marked the fifth anniversary of the CSP in 2025, defence and security ties have emerged as a cornerstone of the bilateral partnership, driven by converging concerns over China’s growing assertiveness in the Indo-Pacific, particularly in the South China Sea and along the India-China border.
In 2025, India built upon the momentum generated by a ministerial visit to Papua New Guinea and the visit by Fiji’s Prime Minister to India. These visits highlighted the growing importance of the Pacific Island nations in India’s broader Indo-Pacific strategy. The message is unambiguous: collective security, anchored in freedom of navigation (and other provisions of the United Nations Convention on the Law of the Sea), is no longer an aspiration. It is an operational necessity.
Within the Indo-Pacific region, India and Australia must continue to expand collaboration in areas such as maritime domain awareness, autonomous systems, and cyber technologies, under carefully negotiated agreements and frameworks.[4]
Technological Asymmetries as Opportunities
A candid assessment of India-Australia defence dynamics reveals technological asymmetries between the two countries. This situation generates complementarities that can drive collaboration. Specifically, Australia's strengths lie in high-technology niches such as quantum technologies advanced maritime systems (like CEAFAR phased array radars and Nulka active decoys), autonomous underwater vehicles, and signal processing. As a middle power, Australia excels in selective leadership but lacks scale, with many contractors operating as subsidiaries of global firms, imposing licensing restrictions on technology transfer. Conversely, India boasts substantial manufacturing capacity, software expertise, space launch capabilities, and indigenous missile technology. It nevertheless faces gaps in jet engines, semiconductor fabrication, advanced materials, and precision guidance. This inverse dynamic positions the partnership for systems-level synergy: Australia's innovations paired with India's cost-effective production can yield capabilities neither could achieve alone.
Strengthening Military-to-Military Ties
At the operational level, Australia and India have built solid foundations through combined training, expert exchanges, and student placements in their respective defence colleges. To build resilience, focus should shift to deeper integration, such as embedding officers in each other's militaries. For example, hosting an Indian officer at Australia's Headquarters Joint Operations Command would enable rapid information sharing and would enhance crisis response.
Nurturing alumni networks from defence colleges, modelled on Australia's Ikahan with Indonesia, could help sustain the personal connections that can support enduring professional relationships. For example, opportunities exist for Australia to better leverage the expertise and networks made by Australian Defence Force graduates of India's Defence Services Staff College.[5]
Addressing Implementation Barriers
Despite strategic alignment, India and Australia have not yet capitalised on opportunities for defence innovation. For example, at the CUTS International’s Business Roundtable in Sydney in 2025, every company tabled the same task: fast-track pathways to co-produce in India, license intellectual property (IP) under ‘Make in India’, and weave subject matter experts (SMEs) into bilateral supply chains.[6] In all cases, Australian defence innovators struggled with IP concerns, wary of leakage in India's regulatory environment. Such experiences demonstrate that, when it comes to defence cooperation, the real battleground is the factory floor. India’s commitment to overcoming such concerns is highlighted by initiatives like Mission Raksha Gyan Shakti, a framework for the creation and management of IP culture. Given residual concerns among Indian security partners, early collaborations should prioritise non-sensitive areas to build trust.
Strategic Recommendations for the Next Decade
In order to realise a resilient partnership, there must be a phased integration strategy, one that rattles Beijing and rewards shareholders. A phased approach that starts with dual-use technologies can mitigate risks while demonstrating viability.
Such a strategy could begin modestly over the next three years, focusing on areas where both nations already excel. It might include cooperation around maritime surveillance components (like radars and drone swarms), cybersecurity software (built on zero-trust principles), and space ground systems (such as tracking stations and satellite payloads). India’s 500-plus defence Micro Small and Medium Enterprises (MSMEs) and Australia’s 3,000-plus SMEs in autonomy and sensors are eager to collaborate. Joint incubators could be established in Bengaluru and Adelaide, with funded pilot projects supported by procedures that insist on the transfer of technology paired with profit-sharing.
By 2028, with trust earned, cooperation could escalate to more sensitive projects. This might include collaboration over electronic warfare suites, autonomous systems integration, so-called ‘loyal wingman’ drones, and underwater gliders. Supporting such efforts, a bilateral defence industry council could be established with genuine authority. Membership of such a council could be drawn from senior officials from both defence ministries who would meet quarterly, backed by a $100 million seed fund for joint projects, and milestones published for public scrutiny.
Further initiatives could include:
- Mutual recognition of performance standards. Under such arrangements, Australia would accept Indian research and development certification, export controls would be aligned to avoid last-minute shocks, visas for engineers would be fast-tracked, and IP frameworks would be established to reward openness without risking reckless exposure.
- Resourcing public-private partnerships. The focus could include collaboration around artificial intelligence (AI) for predictive maintenance, quantum-secure communications, and swarm robotics. Universities could be recognised as co-owners of the breakthroughs, not mere consultants, because the next billion-dollar innovation will emerge from a lab, not a legacy giant.
- Harnessing emerging partners. ‘Defence Matchmaker’ summits could be hosted at which primes and startups are connected at speed. Such an initiative would recognise that small firms are the lifeblood of technological innovation.
Political leaders thrive on signing MOUs, but factories run on deliverables. The next decade belongs to whoever ships hardware, not headlines. India offers scale, Australia precision. Together, they can forge a defence industrial base that is resilient, profitable, and unmistakably formidable across the Indo-Pacific.
About the Authors
Pradeep Mehta is the Secretary General of Consumer Unity and Trust Society (CUTS) International. Purushendra Singh serves as Associate Director and Anjali Shekhawat as Senior Research Associate at CUTS International as well.
Endnotes
[1] Jane Edmondson, The Indo-Pacific region's future of defence, 2025, July 14, https://www.vettafi.com/insights/indexing-article-the-indo-pacific-region-s-future-of-defence, Accessed on November 22, 2025.
[2] Indian Ministry of Defence, A Record Over Rs 6.81 Lakh Crore Allocated in Union Budget 2025-26 for MoD, an Increase of 9.53% From Current Financial, 2025, Feb 01, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2098485 , Accessed on November 12, 2025.
[3] Australian Department of Defence, Defence Export Strategy, 2018, https://www.defence.gov.au/sites/default/files/2020-08/defenceexportstrategy.pdf, Accessed on November 11, 2025.
[4] Indian Ministry of Defence, 9th India-Australia Defence Policy Talks held in New Delhi, 2025, 17 March, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2111839®=3&lang=2, Accessed on November 01, 2025.
[5] Kim Heriot Darragh and Gaurav Saini, The Australia-India defence relationship is not all about the numbers, 2025, 6 May, https://www.lowyinstitute.org/the-interpreter/australia-india-defence-relationship-not-all-about-numbers, Accessed on November 11, 2025.
[6] Dipanjan Roy Chaudhury, Australia calls India a 'trusted partner', stresses need to establish a Defence Innovation Bridge, 2025, 13 October, https://economictimes.indiatimes.com/news/defence/australia-calls-india-a-trusted-partner-stresses-need-to-establish-a-defence-innovation-bridge/articleshow/124517136.cms?from=mdr, Accessed on November 25, 2025.
