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Canberra’s ongoing military modernisation and forward-defence posture reflect a strategic shift in its regional outlook, aligning closely with India’s Indo-Pacific vision amid questions over Washington’s commitment to the region.
Union Defence Minister Rajnath Singh’s visit to Australia on 9–10 October 2025, the first by an Indian defence minister since 2013, was aimed at strengthening India-Australia ties at a time when both countries face uncertainties related to the attitude of the United States towards the Indo-Pacific project. Recall that India signed a joint declaration on security cooperation with Japan during Prime Minister Narendra Modi’s visit to Tokyo on 29 August.
In Australia, Rajnath Singh inked three key pacts that underscored the “strategic convergence” between the two sides. The pacts concerned sharing classified information, mutual submarine search and rescue cooperation, and the establishment of joint staff talks. India already has a military logistics support agreement in place since 2020, and the two sides have operationalised an air-to-air refuelling pact.
The two sides reviewed the gamut of the India-Australia relationship and discussed the potential for a deeper defence industry partnership. Both countries also expressed their joint determination to cooperate “for a free, open and resilient Indo-Pacific.”
In February, Australia was rudely shaken by the entry of a PLA Navy Task Group comprising a frigate, a cruiser, and a replenishing vessel into its Exclusive Economic Zone near Tasmania on 25 February. Thereafter, by March 9, it had circumnavigated Australia, entered the Indian Ocean, and exited through the Sunda Strait in Indonesia. The Task Group conducted routine patrols and live-fire drills in what was clearly a display of Chinese power.
Formally, the US remains committed to its Indo-Pacific strategy based on the Quadrilateral Security Dialogue, which involves two of its bilateral alliance partners—Japan and Australia—and its Indian Ocean partner, India. But the Quad, which relies on soft power strategies, faces challenges as the US dismantles its soft power apparatus, such as USAID, and alienates friends with tariffs.
In March, Secretary of Defense (now Secretary of War) Pete Hegseth toured the region and reaffirmed America’s commitment to Quad partners. Secretary of State Marco Rubio’s trip to Malaysia to attend the ASEAN foreign ministers’ summit, however, was described by analyst Derek Grossman as “an entirely forgettable, regrettable affair”.
Notwithstanding—and now perhaps because of—the United States, Australia is undertaking its most significant military transformation in recent times. This includes boosting its defence spending to modernise its forces, revitalising alliances through AUKUS, and strengthening security engagement with its Pacific Island and Indian Ocean neighbours.
While facing the whiplash of tariff impositions, the Asian allies—Japan, South Korea, the Philippines, and Australia—were also confronted by a United States that continued to make demands for greater defence expenditures. This was despite clear evidence that countries like Japan and Australia had heard the message and were, indeed, stepping up their defence efforts. But the insistence on even higher spending by the US led to publicly expressed resentment among countries like Japan, Australia, and South Korea.
At the Shangri-La Dialogue in early June this year, Hegseth demanded that Australia increase its defence spending to 3.5 percent of GDP. This was swiftly rejected by Australian Prime Minister Anthony Albanese. A few days later, the Pentagon announced a review of the US role in the multibillion-dollar AUKUS submarine deal.
In a clear message to the Indo-Pacific, in May 2025, a Pentagon official noted that Hegseth had ordered the drafting of a new US defence strategy that would “prioritize defense of the US homeland, including America’s skies and borders, and deterring China in the Indo-Pacific.” Subsequently, Politico revealed in September that the latest draft “places domestic and regional missions above countering adversaries such as Beijing and Moscow.”
Notwithstanding—and now perhaps because of—the United States, Australia is undertaking its most significant military transformation in recent times. This includes boosting its defence spending to modernise its forces, revitalising alliances through AUKUS, and strengthening security engagement with its Pacific Island and Indian Ocean neighbours.
The 2024 National Defence Strategy (NDS) and the updated Integrated Investment Program (IIP) make clear that Australia’s aim is “national defence through denial”—ensuring the country can deter and respond to threats well before they reach its shores.
Australia’s defence budget has expanded sharply in recent years. Its current defence spending of about US$53 billion per year, or 2 percent of GDP, is set to increase steadily to an estimated US$100 billion, or 2.4 percent of GDP, by 2033-34. The Integrated Investment Program allocates about AU$330 billion over the decade, with an additional AU$50.3 billion “lift” under the NDS.
There is also a shift in the approach—from the “defence of Australia” doctrine to a more forward deterrence and regional engagement posture.
Australia’s defence budget has expanded sharply in recent years. Its current defence spending of about US$53 billion per year, or 2 percent of GDP, is set to increase steadily to an estimated US$100 billion, or 2.4 percent of GDP, by 2033-34. The Integrated Investment Program allocates about AU$330 billion over the decade, with an additional AU$50.3 billion “lift” under the NDS.
As part of this shift, the re-emergence of Northern Australia as the core of the country’s defence strategy is notable. Given its geography, the north is a kind of frontline, proximate to maritime chokepoints and the landmass of Southeast Asia.
A second element of this approach is the effort to push out Australia’s defence perimeter into the Pacific Islands region. Given active Chinese diplomacy in the area, Canberra has reacted strongly, roping in the US—and, to a limited extent, India—into the effort. The goal is to position Australia as the leading partner of the Pacific Island countries, supporting their sovereignty, resilience, and disaster responses. Recently, Australia and Papua New Guinea signed a mutual defence treaty; PNG is the largest and most populous of the Pacific Island countries. India established a Forum for India-Pacific Islands Cooperation (FIPIC) in 2014 to boost political, economic, and developmental cooperation with the region. The last FIPIC summit was held in Papua New Guinea in 2023.
Another key region for Australia’s forward defence is the Indian Ocean. Back in the 1980s, Australia set up HMAS Stirling, a naval base near Perth, to focus on the region. Now, that facility is being expanded to accommodate Australian nuclear-powered submarines as part of AUKUS.
There is also enhanced cooperation with India through the Quad on maritime domain awareness, undersea surveillance, and joint naval exercises such as AUSINDEX and Malabar. The Cocos Islands are gaining importance, with airfields being upgraded for long-range maritime patrol aircraft and drones to monitor the northeastern Indian Ocean region. As part of their Mutual Logistics Support Agreement of 2020, Indian Navy and Air Force aircraft visit the islands. The two countries have also cross-deployed their respective P-8 maritime reconnaissance and ASW aircraft to each other’s bases and have conducted coordinated patrolling as part of their joint exercises. While India can easily surveil the Malacca Strait, Australian cooperation is invaluable for information regarding traffic in the Ombai-Wetar, Sunda, and Lombok Straits.
With the AUKUS programme, Australia began significantly enhancing its maritime capabilities. The programme will deliver nuclear-powered submarines to Australia through two routes: first, through access to US Virginia-class submarines and the eventual design and construction of a new AUKUS-class submarine based on a British design; and second, by providing Australia access to advanced military capabilities in a range of areas—from underwater robotics, AI, and quantum technology to hypersonics, cyber, and electronics.
Another key region for Australia’s forward defence is the Indian Ocean. Back in the 1980s, Australia set up HMAS Stirling, a naval base near Perth, to focus on the region. Now, that facility is being expanded to accommodate Australian nuclear-powered submarines as part of AUKUS.
However, there are currently some question marks over the AUKUS programme. In June, as noted earlier, the US began a review of the programme, which remains underway.
In August, Australia awarded a contract to Japan’s Mitsubishi Heavy Industries for 11 upgraded Mogami-class frigates in a deal worth US$6.5 billion. The first three will be built in Japan and the others in Australia. These warships will go a long way in enhancing Canberra’s maritime capability.
Australia’s military buildup represents a significant redefinition of national defence—from a sense of continental isolation to the perceived need for regional engagement. Through rising budgets, modernised forces, and strategic partnerships, Canberra aims to secure its northern frontier, strengthen its ties in the Pacific, and shore up its presence in the Indian Ocean. This comes at a time when its time-tested ties with the US are evolving under increased strain, and its relationships with regional powers such as Japan, India, and Indonesia are deepening.
For India, Australia represents a reliable partner to sustain the Indo-Pacific strategy regardless of the US approach. Australia is a good fit for developing a regional partnership based on common values and interests. Regional powers such as Japan, India, and Australia must step up to maintain their own deterrence capacity through a strategy that combines military capability-building with diplomatic engagement to promote regional trust.
Manoj Joshi is a Distinguished Fellow at the Observer Research Foundation.
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Manoj Joshi is a Distinguished Fellow at the ORF. He has been a journalist specialising on national and international politics and is a commentator and ...
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