Prime Minister Narendra Modi has said the Indo-Pacific region faces a number of challenges such as climate change, terrorism, security of sea lanes of communication and piracy, and asserted that India believes they can be addressed only through shared efforts.

In an interview to "The Australian" newspaper, he said he wants to take the relationship with Australia to the "next level", including closer defence and security ties to help ensure an "open and free" Indo-Pacific.

"I am not a person who gets satisfied easily," he was quoted by the newspaper as saying.

"I have seen that Prime Minister Albanese is the same. I am confident that when we are together again in Sydney, we will get the opportunity to explore how we can take our relations to the next level, identify new areas of complementariness and can expand our co-operation," he added.

Modi arrived in Australia on Monday for the third and final leg of his three-nation tour during which he will hold talks with his Australian counterpart Anthony Albanese and attend a community event to celebrate the country's dynamic, diverse Indian diaspora.

He said he wants the two countries to push to realise the true potential of closer defence and security ties amid increasing defence links between the two countries recently.

"As two democracies, India and Australia have shared interests in a free, open and inclusive Indo-Pacific. There is alignment of our strategic viewpoints," he said.

"The high degree of mutual trust between us has naturally translated into greater cooperation on defence and security matters. Our navies are participating in joint naval exercises," he said.

He also rejected the suggestion that the bilateral relations would be harmed by India's "refusal" to criticise Russia as Australia has been high critical of the country over its war with Ukraine.

"An advantage of being good friends is that we can discuss freely and appreciate each other's viewpoint. Australia understands India's position and it does not impact our bilateral relationship," Modi said.

He hoped the visit would allow both countries to identify new areas of cooperation, ranging from new technology, clean energy, critical minerals, mining, cyber space, building resilient supply chains to movement of skilled professionals, according to the interview.

He said that since his last visit the bilateral relationship has been "fundamentally transformed" by annual summits, an economic cooperation and trade agreement, and the elevation of relations to a comprehensive strategic partnership.

"We have progressed significantly in the areas of defence, security, investment, education, water, climate change and renewable energy, sports, science, health, culture, among others," Modi told the newspaper.

"Our people-to-people contacts remain a strong pillar of our partnership. The Indian diaspora in Australia has increased over the past years," he added.

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