India’s deepening role in the China-led Shanghai Cooperation Organisation and its renewed embrace of China and Russia are reshaping Asia’s balance of power. Michael Sainsbury on the implications for Australia.
Australia has spent years treating the Quad and AUKUS as the cornerstones of its security architecture. But India’s increasingly prominent role in the Shanghai Cooperation Organisation (SCO) exposes how fragile that bet really was.
For Canberra, this is more than awkward optics: it shows how little agency Australia retains when others start redrawing the map.
What began in the 1990s as “The Shanghai Five” – China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan – a Eurasian security alliance, has morphed into a broader regional alliance to include India and Pakistan. Its rise has been mirrored by the rise of the BRICS alliance, whose agenda is principally economic cooperation.
As former Australian ambassador to China, Geoff Raby explains, the SCO was born amid rising Islamist militancy in Central Asia and a deteriorating Eurasian security environment.
Today it is a non-Western security organisation, co-led by China and Russia but with Beijing in the driver’s seat—especially since the Ukraine war corroded Moscow’s credibility. The SCO runs joint exercises and intelligence coordination and, above all, symbolically stands as a counterpoint to Western-led institutions.
From Cold War blocs to SCO
That symbolism matters. At the 2025 summit in China this week, Xi Jinping has pitched the SCO as an alternative to Cold War blocs. Images of India’s president Narendra Modi conferring with Xi and Vladimir Putin did the rest, a quiet reminder that India has no intention of letting the West – or anyone else – set its strategic boundaries.
New Delhi calls this ‘multi-alignment’. India’s External Affairs Minister S. Jaishankar has been explicit: India will move in different directions at once – buying Russian oil, joining US initiatives, sparring with China along the long-disputed border known as the Line of Actual Control, and sitting in both the Quad – a loose alliance between Australia, India, Japan and the US – and the SCO.
This isn’t indecision, it’s strategy. For Australia, it dismantles the assumption that India would steadily fall into line with Washington, Tokyo and Canberra in the event of a crisis. As Raby puts it: “The Quad was supposed to be our hedge—yet we’ve just watched one of the Quad members create their own hedge. That’s realpolitik in the new world: more nuanced, more difficult”.
Modi’s warming relationship with China and Russia contrasts sharply with the breakdown of the India and US strategic coordination, casting doubt on Australia’s reliance on a unified Western front.
Australia’s strategic misread?
Canberra has misread the signals for years, says Raby. India’s role in the Non-Aligned Movement never vanished; it was re-tooled for a multipolar era. Raby is blunt: “If you look at India’s history and its central role in the Non-Aligned Movement, you do wonder how people ever thought otherwise. They know little about history and don’t care for ideologically driven analysts from Washington’s neocon school, the same crowd that gave us Afghanistan and Iraq”.
Tariff shocks and a more transactional Washington have already complicated India/US trade dynamics, nudging New Delhi to hedge even harder and pushing India closer to Beijing.
The numbers explain the leverage problem. In 2023–24, China remained Australia’s #1 two-way partner at $325.5B (25.7% of all trade), with the US #2 at $125.8B (9.9%) and India #5 at $50.1B (4.0%).
On exports, China took 32.2% of Australia’s total; the US 5.7% and India 5.2%. On imports, China supplied 18.7%, the US 14.6% and India 2.6%.
On the Indian side, the US was India’s largest trading partner in FY 2024–25 with $US131.8B in two-way trade, while China accounted for about $US118.4B in FY 2023–24, and remains a dominant import source. In Q1 FY 2024–25, the US absorbed ~19% of India’s exports.
Raby’s verdict is cutting:
Australia is like a shag on a rock.
The United States is pursuing its own security interests – often at odds with Australia’s – and the US doesn’t really care much about the region.”
The path forward
The problem is not just bad bets but atrophied statecraft. Successive governments hollowed out long-range strategic thinking just as the world became more complicated. “We’ve become entirely reactive,” Raby says, adding that there’s no sustained internal conversation until something semi-dramatic happens. “We’ve given up our agency – our capacity to shape our external environment,“ he said.
To claw it back, Australia should stop waiting for US approval and start exercising its own judgment. That means sovereign capability that complements AUKUS but does not depend on it; an India policy that accepts divergence as well as overlap; and the unglamorous grind of regional diplomacy, language training and coalition-building.
Raby’s warning from 2020 echoes louder today: “Over 30 years we’ve run down the skills needed to navigate it… Unless we rebuild, we’ll keep confusing other people’s choreography for our own.”
The Quad is a supposed hedge for Australia, but India is playing the hedging game with more fluency, with Modi’s latest move on display this week. China is providing the stage as the U.S. grows more transactional. Australia can still shape outcomes—but only if it learns once again how to act with agency rather than as an anxious spectator.
Michael Sainsbury is a former China correspondent who has lived and worked across North, Southeast and South Asia for 11 years. Now based in regional Australia, he has more than 25 years’ experience writing about business, politics and human rights in Australia and the Indo-Pacific. He has worked for News Corp, Fairfax, Nikkei and a range of independent media outlets and has won multiple awards in Australia and Asia for his reporting. He is a fierce believer in the importance of independent media.