PRIME Minister Julia Gillard says Australia and India are regional partners and she has raised the prospect of the two countries moving to full joint naval exercises.
Defence and security links should be increased as the countries had common security interests, including in the protection of maritime routes, she said.
Speaking to a business lunch, she said defence and security interaction had stepped up in recent years but should go further. ''In time this could include more regular and combined talks at ministerial level, and stronger co-operation between our defence forces, including full naval exercises,'' she said.
Earlier the Prime Minister, who is on a state visit, was given a full ceremonial welcome at the Presidential Palace, inspecting a guard of honour before being formally met by Prime Minister Manmohan Singh. She then laid a wreath at the Gandhi memorial before an intense day of political meetings at which a range of economic and security issues were canvassed, including uranium sales.
Her day of meetings included a discussion with the powerful Congress Party president Sonia Gandhi at her residence. She was due to attend a state dinner before flying back to Australia overnight.
The theme of the visit has been to broaden and deepen the economic relationship with India, especially to allow Australia to take advantage of the expansion of the Indian middle class. But Ms Gillard also has been promoting greater political and strategic co-operation and more people links.
She said that when Australia took over from India next year as chair of the Indian Ocean Rim Association for Regional Co-operation, ''we will continue to build on the work India has done to strengthen Indian Ocean co-operation''.
Both countries remained undaunted in the face of international terrorism and were determined to defeat it. Asked at a news conference about the future of defence ties, Ms Gillard said: ''We share an ocean that is important to both of us, and there is an organisation that brings together the countries that ring [it]. India has been in the leadership of that body, we are to take over the leadership of it. So it makes sense for us to work closely together on circumstances in the Indian Ocean including maritime security questions.''
Asked whether she would be issuing a fresh invitation to Prime Minister Singh to visit Australia (it has been 26 years since an Indian PM visited), Ms Gillard said: ''We would love to welcome Prime Minister Singh if he was available to visit and, of course, he has a standing invitation.''
But, mindful of the elderly Mr Singh's likely reluctance, she pointed out that leaders' travel in the modern world was intense and said she and Mr Singh met regularly in the international forums they attended.
''I see Prime Minister Singh at the East Asia summit. I see him at the G20. I see him at a variety of events around the world.''
Before her meeting with Prime Minister Singh, Ms Gillard said her discussions would cover proposals for new co-operation in areas such as water technology and energy security.
In the past year, with Australia opening the door for uranium sales to India, a ''barrier to relations'' had been removed. She said she looked forward to discussing the next steps for ''our peaceful nuclear co-operation'' in her talks with Prime Minister Singh. These are expected to result in the start to formal safeguard negotiations.