Australia and India have entered a new era of security and military co-operation based on shared values and aimed at defending a rules-based international order.

The Indian and Australian governments have now confirmed a Fairfax report this morning that prime ministers Narendra Modi and Tony Abbott quietly signed a sensitive and potentially transformative new framework agreement.

The confirmation came after China's President Xi Jinping had flown from Canberra to Tasmania.

"They have decided to establish the Framework for Security Cooperation to reflect the deepening and expanding security and defence engagement between India and Australia, and to intensify co-operation and consultation between Australia and India in areas of mutual interest," said India's Ministry of External Affairs, on its website.

The framework lays out an extensive "action plan" including annual prime ministerial summits and maritime military exercises, according to the Indian government website.

The action areas include counter-terrorism, border control and close consultations on regional and international institutions.

It even commits Australian "support for India's bid to be a permanent member of the United Nations Security Council".

Australian officials later "noted" the framework in a joint statement from Mr Abbott and Mr Modi, after Mr Abbott departed to join China's President Xi for an afternoon in Tasmania.

The joint statement said the new framework would guide closer bilateral collaboration across "defence, counter-terrorism, cyber policy, disarmament and non-proliferation and maritime security".

"They agreed to hold regular meetings at the level of the Defence Minister, conduct regular maritime exercises and convene regular navy to navy, air force to air force and army to army staff talks," said the joint statement.

Mr Modi first revealed the framework agreement in a media statement this morning, while standing alongside Mr Abbott.

"I welcome the new framework of security co-operation," said Mr Modi, without introduction or explanation.

"Security and defence are important and growing areas of the new India-Australia partnership for advancing regional peace and stability and combating terrorism and transnational crimes," he said.

Mr Modi's short revelation to journalists was made just minutes before he gave a historic address to a joint sitting of Parliament, the same venue where President Xi had yesterday pledged his nation to peaceful co-operation.

Mr Modi's powerful speech placed Australia at the centre of India's vision of a prosperous and regional order, at the juncture of the Indian and Pacific oceans, at a time when he said security was valued more highly than ever.

He talked of what the two countries could do working together in maritime security and counter-terrorism, in regional and global institutions, and in entrenching international norms of good behaviour.

"India and Australia can play their part in it by expanding security co-operation," Mr Modi told the joint sitting in unscripted English, when he more commonly speaks in Hindi at international events.

"What we do need is to work together, and with others, to create an environment and culture that promotes the currency of coexistence and co-operation in which all nations small and big abide by international law and norms ... even when they have bitter disputes," he said.

Mr Modi and Mr Abbott are unlikely to mention China in the context of their plans of military co-operation, at least while President Xi remains in Australia.

Nevertheless, the muscular China that has been on display in recent years has been at the forefront of their concerns.

Mr Modi has been chafing at Chinese military incursions on the Indian side of the "line of control", in the Himalayas.

Mr Abbott has been exercised by China's territorial conflicts with neighbours in its maritime periphery.

"There's an enthusiasm on both our parts for more bilateral and trilateral military exercises  and we hope to see much more of that in the years ahead," said Mr Abbott.

Earlier, Mr Modi said his visit with Mr Abbott this morning to the Australian War Memorial  had "reminded us of the need to strive together for a better world".

The new India-Australia framework dovetails neatly with both countries tightening ties with both Japan and the United States, suggesting the informal resurrection of a "security quad" or "security diamond" of democratic powers that was previously dropped due to Chinese concerns.

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