From Washington to Canberra –
lessons for Australia-India defence cooperation

As India and Australia consider a closer defence and industrial partnership, I recall a story told to me in Washington in the early 2000s by a veteran of US-India relations.

By then, he was the International Business Development Director for a major defence company. Around 2004, while discussing an export licence with the US government, he was asked whether Krishna Menon was still India’s Defence Minister. Menon had left the job in 1962.

While I share this story with wry amusement, it highlights a serious problem. Strategic relationships can change much faster than the institutions responsible for managing them. The lesson is that bureaucracies often hold on to outdated assumptions well after strategic circumstances have moved on. The US bureaucracy remembered a veteran of India’s freedom movement who was seen as strongly anti-American, even though India was about to sign a nuclear deal with the US. Australia may now face a similar challenge as it builds a closer defence relationship with India.

That nuclear deal – driven at the political level – helped open the way for the US-India defence relationship to grow into what it is today. India now operates several types of US defence equipment that Australia also uses, and conducts more exercises with the US than with any other country.

Building the foundations – four themes in the Australia-India defence relationship

As Delhi and Canberra explore ways to deepen their industrial partnership, success will depend less on political declarations and more on building trust and habits of cooperation. Four themes stand out.

1. India and Australia are complementary Indian Ocean states. Both have broadly aligned security interests in the region and want to see each other succeed.

Their defence economies are also complementary. India has a large workforce but not enough jobs, while Australia faces the opposite problem. The first group of India’s ‘Agniveer’ short-service recruits will complete their four years in the Indian Navy next year. By then, they will have valuable skills for the defence industry. Only 25 per cent will remain in the Navy, meaning the rest will enter the job market. The question is whether some of these skilled workers can move into the defence supply chain.

Security concerns will limit the ability of Indian workers to work directly on Australian defence programs. But the different workforce profiles of the two countries suggest other opportunities worth exploring. The benefits of these complementary labour markets are evident in that major US companies like Lockheed and Boeing already conduct significant work in India. For instance, the empennage (tail assembly) of every new C-130 in the world is now built in Hyderabad.

India also has several promising defence start-ups that could present opportunities for Australian investors.

2. India’s relationship with Russia is still not fully understood in Canberra. India and the US eventually reached an uneasy understanding of India’s ties to Russia. Although this has been tested several times, the broader strategic picture has remained: India is growing, the US has an important role, and India’s two strong partners, Japan and Israel, are both closely aligned with the US. This places India in a world order that is, if not US-led, at least broadly friendly to the US.

When faced with a choice between a Russia-China-led order and a US-friendly order, India’s preference has usually been clear. India’s relationship with China remains complex and is shaped by strategic rivalry which limits the extent to which the two can align.

Furthermore, in defence equipment, Russia’s share of new Indian procurement has been falling as India buys more from Israel and the West. India’s military is also less positive about Russian sub-systems and their reliability, though India will still buy equipment from Russia that it cannot get elsewhere. This is especially true in the naval nuclear area.

3. Trust remains a challenge. The so-called ‘nest of spies‘ publicly referenced by ASIO Director-General Mike Burgess has influenced perceptions of India within parts of Australia’s national security community. In an industry such as defence, where sharing information and technology is critical, any perceived trust issue can have a disproportionate effect. These concerns can be made worse by an incomplete understanding of  India’s regional relationships and strategic choices.

Although there is growing talk of defence industry cooperation, conversations in Canberra suggest progress could be slower because of these concerns. At present, some Australian defence technology remains difficult to export to India, even in the areas in which Australia has world-leading expertise.

Both governments will need to ensure these concerns are addressed if defence cooperation is to advance. This also raises the issue of protecting intellectual property. Some people in Australia still believe that India does not protect intellectual property well. Again, this echoes concerns raised in Washington in the 2000s.

4. India is a defence power in its own right. It is not a technologically backward defence economy that Australia needs to ‘help’. Viewing India as a capable defence power with its own strengths and expertise will help put the partnership on a stronger foundation.

India has already put nuclear submarines in the water and has moved ahead of Australia in private space launches. The ‘we can’t give you this’ approach has been a feature of the US-India defence relationship for at least five decades.

Even after the US-India nuclear deal, I remember a conversation with a US defence company in the late 2000s about its difficulty getting an export licence to India for technical help with adapting the Light Combat Aircraft for naval use – something the company thought should have been relatively simple. At the time, the bureaucracy had still not caught up with the politics.

Eventually, Washington recognised that India’s strategic needs would determine what it bought and from whom. It was not just approvals that needed to be considered for their wider impact; denials did too. India gaining certain capabilities from the US came to be seen as strategically important to both countries.

What does the future hold?

First, the two countries could start in an area where partnership is immediately achievable, such as naval sustainment. Australia is becoming a hub for maintaining naval vessels that operate for long periods in the Indo-Pacific. If India needs a place to support its ships while they are operating away from home, why not Australia?

This would require the two bureaucracies to develop muscle memory through regular interaction – for example, the groundwork to allow Indian support teams to access Australian naval facilities. It would also help Indian and Australian industry build trust, share knowledge, and protect it together.

Making these government interactions routine – another focus of US-India defence relations 20 years ago – could also strengthen the wider strategic partnership.

Second, the Australian and Indian governments could establish a dialogue on defence supply chains. Australia has world-leading technology in areas such as radars and navigation systems. Australian companies also have designs that have never reached the market. India has the scale and ambition to produce systems such as drones and loitering munitions in large numbers.

This dialogue could look at how to combine Australian capital, Australian and Indian technology, India’s manufacturing scale, and other complementary industrial strengths to create more value for both countries’ and position for exports in a competitive international market. Is there a future where Indian industry can offer work similar to what is in place with US companies like Boeing, Bell, and Lockheed Martin?

This is not just about business-to-business cooperation. Both countries have local content rules. For individual programs, the governments could consider allowing companies from the other country to be exempt from some of these rules.

A corollary to such a dialogue is that both countries operate several of the same types of US equipment. India, for example, is the second-largest operator of the C-17 transport aircraft. Where practical, coordinating US Foreign Military Sales requests could help both countries get the best pricing at the time.

A similar mechanism in the US-India relationship was the Defense Technology and Trade Initiative (DTTI), which aimed to smooth over bureaucratic hurdles in defence trade and identify projects for co-production and co-development. Despite a mixed record of success, it did arguably get both bureaucracies talking.

Third – and this is the run phase – the countries could move towards co-development of future systems. This will require both governments to build the trust and processes that are not yet in place. A well-known example from the US-India relationship was a US proposal in 2012 for India to co-develop the next generation of the Javelin anti-tank missile. India rejected the proposal at the time.

In August 2026, India finally agreed to buy the Javelin from the US with co-production in India included. This occurs at a time when the overall relationship between India and the US is under pressure. By this point, bureaucratic inertia was no longer an obstacle to the defence relationship.

Both Indian and Australian navies are likely to develop a new generation of destroyers at roughly the same time – Australia with the successor to the Hobart class and India with its Project 18 concept. I don’t suggest this specific program as the goal. But imagine a future in which both countries could jointly design a defence capability or platform that each could customise and use.

Getting there would require both governments and industries to build interactive familiarity and processes, so that each side sees the other’s success as something that can benefit them too.

Conclusion

India and the US eventually overcame bureaucratic inertia to build the close defence industrial ties that exist today; a partnership that would be unrecognisable to the US bureaucrat who, 20 years ago, was still asking about Krishna Menon.