Russell Buzby

On 15 July, Washington’s most prominent AUKUS sceptic dismissed talk of an emerging alliance of middle powers, arguing that traditional United States security partners would be wasting their time trying to become less dependent on Washington (The Nightly, 2026a). Five days earlier, Narendra Modi had left Melbourne at the end of the third India-Australia Annual Summit, and the reason the two events belong in the same paragraph is that the second is precisely the thing the first was dismissing.

The Melbourne summit ran from 8 to 10 July and produced eighteen outcomes ranging across defence and energy to technology and education. The defence centrepiece was a new Joint Declaration on Defence and Security Cooperation, committing both countries to closer work on maritime security, defence industry and regional stability, with annual defence ministers’ dialogues to hold it together. Alongside it, the two governments finalised administrative arrangements under the civil nuclear agreement that allow Australian uranium exports to India for peaceful purposes under international safeguards. ASPI read the visit as two countries seeking strength from each other amid growing unease about relying on the United States to resist China (ASPI, 2026a).

The economic logic runs the same way. The Lowy Interpreter argued in mid-July that India’s rapidly expanding defence industrial base opens genuine export and co-production opportunities for Australia, which would diversify supply chains that currently run through a small number of partners (Lowy Interpreter, 2026). Scholarship has been converging on the same reading for a while, and it treats these middle-power networks as architecture instead of improvisation. Work on strategic minilateralism reads the Quad, AUKUS and the Trilateral Strategic Dialogue as reshaping the regional architecture (Strategic Minilateralism, 2026). Similar accounts of the sixteenth India-Japan Annual Summit describe cooperation between democratic middle powers as structural to Indo-Pacific governance instead of a passing arrangement (India-Japan summit reporting, 2026).

The strategic case is sound and I do not want to argue with it. Diversification is what a middle power does when its principal partner becomes harder to predict, and doing it in advance is cheaper than doing it in a crisis. Three problems compound around the execution though, and none of them is being discussed as candidly as the announcements.

The first is that the hedge is visible. Washington’s reaction to middle-power talk was contemptuous, and contempt from a partner who supplies your submarines carries a price even when the underlying strategy is correct. Australia cannot hedge discreetly, because a hedge only works if the other partners believe it is real, and anything the other partners believe is also something Washington reads. That leaves a narrow band between a hedge too quiet to reassure India and Japan and one loud enough to irritate the alliance manager in Washington. Nobody has explained where in that band Australian policy currently sits.

The second problem is capacity, and it is the one I would put money on binding first. AUKUS consumes Australia’s scarce defence resources at a rate that leaves very little for a second track. The Osborne submarine construction yard alone now carries A$8.5 billion in committed investment following a further A$4.6 billion announced on 24 July. Australia does not have a spare shipyard, a spare cohort of program managers or a spare pool of qualified welders and systems engineers waiting for the India work to begin. Every co-production arrangement signed in Melbourne competes for the same constrained industrial base as the submarine enterprise, and the submarine enterprise has political priority. That concentration is the alliance risk described in The Boat That Disappeared, and the industrial arithmetic has not improved since.

The third problem is domestic and it belongs to the new Chief of the Defence Force. Survey evidence reported on 20 July found most Australians prioritise army funding even as government investment shifts heavily toward the navy to support AUKUS (The Nightly, 2026b). Admiral Mark Hammond began a four-year term as CDF in July, having come to the role from Chief of Navy with a career built largely in submarines. He inherits a gap between where the money goes and where the public thinks it should go, and his own background makes that a harder case for him to argue without the argument looking self-interested. That is an unfair burden and it is also a real one.

There is a further complication in how thin the hedge is under inspection. Research on India-Australia maritime relations finds selective convergence: real alignment through mechanisms such as AUSINDEX and the Quad, and limited alignment on the blue economy and engagement with small island states (India-Australia maritime convergence, 2026). A partnership can be genuine in the domains where interests overlap and largely declaratory everywhere else, and the count of agreements signed at a summit does not distinguish between the two. Eighteen outcomes is an impressive number until somebody asks which of them will still be funded in 2029.

Space makes the point about unresolved dependency in a different domain. ASPI’s defence conference in mid-July examined Australia’s space security risks against a debate about whether space is becoming a warfighting domain, with adversary counterspace capabilities advancing and Australian access assured largely through partners (ASPI, 2026b). Diversification talk has barely touched that dependency, which is arguably deeper than the submarine one and far less examined.

Put the three problems together and the honest description of Australian strategy is that the country is deepening its dependency on one partner while simultaneously building hedges against that dependency, and has not reconciled the two in public. Both halves of that strategy are defensible on their own terms. The submarine program answers a capability problem no alternative solves in the time available, and the minilateral track answers a reliability problem the submarine program cannot address by itself. What no official document supplies is an account of how those two halves fit together, or what happens when they compete for the same money.

That account would not be hard to write. Say what the hedge is for, in terms of the specific dependency it is meant to reduce. Put a budget line against the hedge, because a strategy without a dedicated appropriation is a communiqué. Say what Australia would decline to do for the alliance if the hedge worked, since a hedge that changes no behaviour is not much of a hedge. Then make the whole account public, because the domestic constituency for the navy-heavy profile is already weaker than the constituency for the army, and a public that has never been given the logic will not defend it under pressure.

Washington’s AUKUS sceptic called the middle-power hedge a waste of Australian time. The strategy is sound enough to survive that criticism. It has not yet been given an appropriation, and until it is, the criticism keeps some of its force.

References

ASPI (2026a, 13 July). Modi’s visit: Australia, India seek to gain strength from each other. The Strategist. https://www.aspistrategist.org.au/modis-visit-australia-india-seek-to-gain-strength-from-each-other/

ASPI (2026b, 15 July). ASPI Defence Conference tackles Australia’s space security risks. The Strategist. https://www.aspistrategist.org.au/aspi-defence-conference-tackles-australias-space-security-risks/

Defence Connect (2026, 24 July). Government commits $4.6bn more to Osborne submarine yard. https://www.defenceconnect.com.au/naval/18596-government-commits-4-6-billion-more-to-osborne-submarine-yard

India-Australia maritime convergence: SAGAR, AUSINDEX and the limits of issue-specific alignment (2026). Semantic Scholar.

India-Japan 16th Annual Summit: defence, economic security and supply chain resilience (2026). Semantic Scholar.

Lowy Interpreter (2026, 14 July). India’s defence export rise opens a door for Australia. https://www.lowyinstitute.org/the-interpreter/

Strategic Minilateralism and the Regional Security Architecture of the Indo-Pacific: The Quad, AUKUS, and the Trilateral Strategic Dialogue (2026). Semantic Scholar. https://semanticscholar.org/paper/38cd3a197ce823493384505b8f26e22aeeff97fa

The Nightly (2026a, 15 July). Washington’s leading AUKUS sceptic scoffs at talk of new ‘middle powers’ alliance. https://thenightly.com.au/politics/us-politics/washingtons-leading-aukus-sceptic-scoffs-at-talk-of-new-middle-powers-alliance–c-22582334

The Nightly (2026b, 20 July). Australians love the army. That’s a problem for new Australian Defence Force Chief Mark Hammond. https://thenightly.com.au/politics/australians-love-the-army-thats-a-problem-for-new-australian-defence-force-chief-mark-hammond-c-22601622