By Kirsty Needham

SYDNEY India, Japan, the United States and Australia will hold the Malabar navy exercise off the coast of Sydney on Friday, the first time the war games previously held in the Indian Ocean have taken place in Australia.

Japanese and Indian navy vessels stopped in Pacific Island countries Solomon Islands and Papua New Guinea on the way to Sydney, highlighting the strategic importance of the region at a time of friction between China and the United States.

Vice Admiral Karl Thomas, Commander of the U.S. Navy's Seventh Fleet, said at a press conference on Thursday in Sydney the exercise was "not pointed toward any one country" and would improve the ability of the four forces to work with each other.

"The deterrence that our four nations provide as we operate together as a Quad is a foundation for all the other nations operating in this region," Thomas said.

"Oceania, the island nations that are just northeast of Australia...all of our nations now are focusing on those countries," he added.

Indian Navy Vice Admiral Dinesh Tripathi said there had been large changes in the world since the United States and India held the first Malabar Exercise in 1992 at the end of the Cold War.

When Australia participated for the first time in 2007, it "sent some signals around the world", he said.

Australia dropped out of the so-called Quad in 2008 after protests from China over its participation in Malabar. The Quad was revived and Australia rejoined Malabar in 2020, although China continues to criticise the grouping as an attempt to contain it.

"The Pacific is very important to us," said Australian fleet commander, Rear Admiral Christopher Smith.

"We understand people have ambition to continue to grow and develop... but its about transparency."

Ships from the four nations will be joined by Australian F-35 fighter jets, as well as P-8 surveillance aircraft and submarines.

"The underwater battle space is seen to be the front line in terms of competition and potential future conflicts", Smith said.

Malabar is being held off the east coast of Australia, instead of the west coast which faces the Indian Ocean, because ships were nearby after the larger Talisman Sabre exercise involving 13 nations which closed last week, he said.

(Reporting by Kirsty Needham; Editing by Angus MacSwan)