Australia’s Indian Ocean moment

Australia commands the Indian Ocean’s largest EEZ but barely looks west – three practical steps can close the gap.

Alexander Lee

21 July 20264 min read

Australia has been gradually coming to the realisation (Opens in new window) of what an Indian Ocean heavyweight it is. Australia holds the largest Exclusive Economic Zone of any Indian Ocean state, and this ocean connects Australia to four G20 economies – India, South Africa, Saudi Arabia and Indonesia – as well as some of the great trade routes of the world. One third of all bulk cargo and two thirds of global oil shipments (Opens in new window) typically transit the region, including Australia’s third largest trade partner, the European Union (Opens in new window).

Australia has historically underplayed this reality. The 2026 National Defence Strategy (Opens in new window), for example, directed international engagement to “the Pacific, Southeast Asia and the Northeast Indian Ocean”. Recent conflict around the Strait of Hormuz and the Red Sea has demonstrated that this is no longer tenable. The Northern Indian Ocean – as opposed to only the eastern waters – is one continuous maritime theatre, and disruptions at its western edge reach Australian shores quickly.

Three things Australia should do

The argument is not for expensive new deployments but for Australia to make smarter use of existing ones in a way that takes account of current events, while respecting that the bulk of Australia’s attention must remain focused on the regions most proximate to the Australian continent.

The Northern Indian Ocean is one continuous maritime theatre, and disruptions at its western edge reach Australian shores quickly.

But extending Defence’s international engagement to include Northwestern Indian Ocean states would formalise relationships Australia is already cultivating informally. The Indo-Pacific Endeavour (Opens in new window) maritime exercises already build on security partnerships across Southeast Asia and the Northeastern Indian Ocean, extending as far west as the Maldives. Australia already has military ties with the United Arab Emirates (Opens in new window). Expanding to include such countries will ensure that collaboration is institutionalised not ad hoc.

Northwestern Indian Ocean states, and the small island states of the Indian Ocean including Maldives and Mauritius, share Australia’s enduring interest in freedom of navigation and would benefit from greater access to Australian expertise in maritime security, disaster relief and cyber resilience.

Australia should update its guidance in strategy documents to reflect this reality. Expanding defence diplomacy initiatives would signal that Canberra’s engagement in the region is sustained rather than episodic.

HMAS Anzac in Port Louis, Mauritius, 2015 (Paul McCallum/Defence Imagery)

Australia has deep expertise to offer Indian Ocean states and genuine shared interests with its neighbours, but the Indian Ocean is institutionally disunited. The Indian Ocean Rim Association (IORA) suffers from low resources, an unwieldy membership and structural weaknesses that have been exacerbated by recent conflict (Opens in new window). A more promising vehicle is the Indian Ocean Commission (IOC) — a smaller grouping of island states in the southwestern Indian Ocean with a stronger track record and recent momentum, having welcomed China, India, Japan and South Korea as observers. Japan has used its observer status to advance its “Free and Open Indo-Pacific” vision and strengthen maritime security in the western Indian Ocean.

Australia should seek the same (Opens in new window). Its experience managing climate shocks and non-traditional security challenges among its Pacific neighbours gives it directly relevant expertise and makes deeper IOC engagement a natural extension of existing capability.

More cooperation with Japan, France and India would also help. The Quad is under strain (Opens in new window), but Canberra’s interests continue to align closely with three powers that matter enormously in the Indian Ocean.

Japan and Australia have just concluded a landmark frigate deal (Opens in new window) and are exploring joint missile and drone production — cooperation that strengthens Australian hard power in the region regardless of broader alliance dynamics.

France maintains bases across the western Indian Ocean and brings nuclear-powered naval capacity and a permanent Indian Ocean presence.

India, the namesake of the Ocean itself, has articulated sweeping maritime ambitions through its 2025 MAHASAGAR doctrine (Opens in new window) and holds naval access agreements across the region.

The window is open

These three steps are mutually reinforcing. Updating strategic guidance signals that Australia is serious about the Indian Ocean and opens the door to greater defence diplomacy efforts. Reinvigorating existing institutions and seeking new membership of regional institutions builds relationships with new and existing partners. Stronger cooperation with Japan, France and India provides the hard power and credibility to back them up.

Together they position Australia as a constructive and credible actor in a region that is being reordered in real time.

Alexander Lee is the author of a new Lowy Institute policy brief “How great power rivalry returned to the Indian Ocean and the stakes for Australia (Opens in new window)”.

About the author

Alexander Lee

Dr Alexander Lee is a Visiting Fellow at the Strategic and Defence Studies Centre at the Australian National University, where he researches Australian strategic policy and is currently leading a Strategic Policy Division grant on Indian Ocean security.

Topics

Australia Defence & security Diplomacy India Japan