Australia and India are hoping to net a more comprehensive economic pact by the end of the year.
Canberra and New Delhi already inked a free trade agreement - India's first with a developed country in more than a decade - and want to upgrade this to "an even more ambitious" comprehensive economic co-operation agreement.
India's high commissioner to Australia Manpreet Vohra said the improving relationship was part of his nation's desire to expand its presence in the Indo-Pacific.
"It is anchored in our desire ... to realise our shared vision of an open free, peaceful and rules-based region that respects sovereignty," he told an event hosted by the Australia-India Institute at Parliament House on Tuesday.
Democratic nations needed to reject revanchist territorial claims, physical aggression, economic coercion and political interference, he said.
The high commissioner also spoke of a mutual commitment to "confront our common challenges and to seize new opportunities as natural partners, strong democracies and dynamic economies".
New Delhi is concerned about the rise of China in the region and threats to the maritime order with the nation reliant on vital trade routes Beijing could shut down in the course of a conflict.
Border skirmishes between the two nations have also heightened tensions between Beijing and New Delhi.
Assistant Foreign Affairs Minister Tim Watts said partnerships in the region were increasingly important during challenging times.
This includes the challenges posed by military build-ups, climate change and the ongoing fallout from the pandemic.
"It's up to all of us to deploy our collective strength, statecraft and influence ... to minimise the risk of misunderstanding and miscalculation to prevent catastrophic conflict," he said.
"Australia and India are close and trusted strategic partners - our partnership contributes to economic resilience and promotes strategic equilibrium in our region."
The sixth Australia-India leadership dialogue will take place in Melbourne in November.
Albanese government ministers have made 16 trips to India, including two by the prime minister.
The Indian diaspora in Australia numbers about one million people.
Two-way trade between the nations was worth $46.5 billion in 2022.
