Indian media reports suggest Australia will be invited back to major naval exercises with India, Japan and the US.
Prime Minister Malcolm Turnbull says discussions on Australia returning to multilateral naval exercises are "progressing well".
It has been reported in Indian media that Australia will be invited to this year's Malabar naval exercises along with India, the United States and Japan.
Mr Turnbull on Tuesday declined to confirm the report but was positive about the idea, which could potentially inflame tensions with China.
"The discussions that we're having are progressing very well," Mr Turnbull told reporters in Brisbane.
"We participated in those exercises in the past ... and we are always looking forward to working with our partners in the region in exercises of that kind."
Defence Industry Minister Christopher Pyne, who was in India for talks last week, said he had "not caught up on that particular piece of news".
"I can't comment until I've seen the detail," Mr Pyne said.
In 2007, Australia participated in Exercise Malabar but the Rudd Labor government withdrew after concerns were expressed by China.
However talks with India to return to the exercises have been ongoing since 2015.