EXCLUSIVE

Narendra Modi is signalling a new policy.

Narendra Modi is signalling a new policy. Photo: Alex Ellinghausen

New Delhi: Australia and India are deepening military ties and reviving the spirit of a controversial four-way democratic coalition with Japan and the United States, in response to growing concerns about China.

Momentum towards full bilateral naval exercises, intelligence sharing and a safeguards agreement for uranium exports has been propelled by the May election of a strong Indian leader, Narendra Modi, who in November is likely to become the first Indian prime minister to visit Australia since 1988.

And it has been spurred by China’s escalating challenges to its eastern and southern neighbours and to what the US and Australia call "freedom of navigation".

Referring to those conflicts, Foreign Minister Julie Bishop raised the spectre of World War I to warn that "random events can unleash forces that quickly spiral out of control".

Communications Minister Malcolm Turnbull said that China's actions were driving erstwhile enemies together.  "The consequence has been how China’s neighbours are drawing closer to the United States than ever before," he said.

Until now, India has been relatively muted in response to People’s Liberation Army incursions across the "line of actual control", which stretches 4000-kilometres along the spine of the Himalayas.  

Mr Modi, however, is signalling a new policy of strategically and forcefully pushing back, according to serving and retired officials.

"Next time the response will not be fudge or denial," said the chief spokesman for Mr Modi’s Bharatiya Janata Party, MJ Akbar, referring to a three-week Chinese army incursion into Indian Kashmir, which took place last year.

"You are playing chess, but the knights are fully armed," he said.

As well as signalling tougher reactions, the Modi administration is helping to weave a web of security relationships stretching east across the Indo-Pacific and south to Australia.  

"Everyone is convinced that we need a very strong countervailing coalition in the region to balance China – not 'contain' China – and Australia must play a very important role," said Shyam Saran, chairman of the national security advisory board under India's National Security Council.  

Next week, Japan’s Prime Minister Shinzo Abe will travel to Australia, where he is expected to sign a breakthrough agreement to enable the export of military technology, potentially including coveted submarine technology.

The agreement will sharpen the northern and southern points of what Mr Abe has previously referred to as a "diamond to safeguard the maritime commons stretching from the Indian Ocean region to the western Pacific".

The idea of a democratic coalition was  spawned a decade ago in a teleconference initiated by the then US secretary of state, Colin Powell, on the day of the Aceh tsunami, according to officials privy to those discussions.

Mr Powell mobilised his Japanese, Indian and Australian counterparts for a humanitarian response that was intended to be faster and bigger than anything the United Nations or China could match, according to officials privy to those talks. 

The momentum carried into a "quadrilateral security dialogue", which later foundered because of design flaws – the world’s fourth largest democracy, Indonesia, was not represented – and also because of a furious Chinese official response to major joint naval drills that took place in 2007 in the Bay of Bengal.

"The rug was pulled from under our feet," said Mr Saran, who was India’s foreign secretary until 2006, noting a perception that prime minister Kevin Rudd had placed priority on relations with China.

Mr Saran said the idea could now be reborn as a consultative security forum that included Indonesia, but should not be badged as a "military alliance". 

"The spirit of a flexible coalition for co-operation and dialogue is coming back," the director of the International Security Program at the Lowy Institute, Rory Medcalf, said. He added that this was a "pivotal" moment in the India relationship.

Australian, Indian and US officials believe there is no need to provoke China's ire by marketing an axis-of-democracy, preferring to leave formal security discussions to the more inclusive East Asia Summit in Myanmar later this year.

The coalition-building has gained renewed interest since the weekend, when China released a new official map that showed large areas of the India's Arunachal Pradesh as Chinese "Southern Tibet".

The map was specially elongated to showcase the extent of China’s claims in the South China Sea, stretching 2500 kilometres south from the Chinese mainland.

Officials say Mr Modi signalled his more assertive stance on the day of his swearing-in ceremony, on May 26, when his staff guided the Tibetan prime minister in-exile and Taiwan representative to the front and fourth rows, respectively. 

"Narendra Modi has a different set of priorities for economic growth, good governance and, above all, national security," a retired senior intelligence officer, referring to the protocol at the ceremony and a series of key appointments, said.

Mr Modi is keen to attract Chinese investment and emulate some of China’s growth success, although his country is far less dependent upon China than either Australia or Japan.

China’s share of Australian merchandise exports have more than doubled, however, to 36 per cent, since foreign minister Stephen Smith stood alongside his Chinese counterpart to announce he was dumping the old quadrilateral security agreement in February 2008.

John Garnaut travelled to India as a guest of the Australian High Commission.