Mr Smith told a meeting of business leaders in India that Australia remained particularly concerned about the level of extremism in the border regions between Afghanistan and Pakistan.

"Modern international terrorism is very mobile, and from Afghanistan it can move north to Europe, or to the south and east into Southeast Asia," Mr Smith said in a speech to the Confederation of Indian Industries in Chennai.

"We are particularly concerned about militancy and extremism in Pakistan's border areas with Afghanistan, which have a direct and deleterious effect on Afghanistan and the 1,100 Australian troops serving there."

The work being carried out by Australian troops in Afghanistan was dangerous, but essential, Mr Smith said.

"Work in Afghanistan is hard and difficult and dangerous, but it is, in our view, essential work in the interest of the regional and the international community.

"So Australia is in Afghanistan for the long haul."

The Australian government had made it clear it wished to cooperate with Pakistan to address the challenges it faces, including developing new aid programs in its border regions.

"We are also looking at stepping up our assistance in areas such as law enforcement and defence cooperation including by strengthening Pakistan's counter-insurgency capacity," Mr Smith said.