The announcement was made in Canberra after discussions with Indian Defense Minister A.K. Antony during an official visit -- the first for an Indian defense minister.
Smith also invited Indian naval ship participation in the navy's International Fleet Review in Sydney Oct. 3-11, a statement by the Ministry of Defense said.
Some 40 visiting warships and 12 tall ships will participate in the review to commemorate the centenary of the first entry of the Royal Australian Navy's Fleet into Sydney harbor in 1913.
Smith and Antony, who arrived in Australia June 4, agreed to cooperate through regional forums, including the Indian Ocean Naval Symposium and the Indian Ocean Rim Association for Regional Cooperation.
Australia will chair IONS next year and host its Conclave of Chiefs in Perth in March. India currently is the chair of the IOR-ARC and Australia the next chair.
Smith said the two countries will continue regular bilateral defense ministers' meetings and military personnel exchanges.
"The 2013 Australian Defense White Paper outlines the profound strategic changes occurring as economic, strategic and military weight shift to the Indo-Pacific region," Smith said.
"India and Australia have a shared interest in helping to address these strategic changes, including through defense collaboration. Today's Defense Ministers' Dialogue in Canberra was a timely opportunity to review progress in the bilateral defense relationship and to examine areas for further collaboration."
"Both sides acknowledged that maritime security and freedom of navigation in accordance with principles of international law is critical for the growth and prosperity of the Asia-Pacific and Indian Ocean regions," a joint statement said.
Antony later met Prime Minister Julia Gillard and political opposition leaders, including Shadow Minister for Defense Sen. David Johnston.
Antony arrived in Australia in Perth on the Indian Ocean coast where he laid a wreath at the Western Australia State War Memorial and met business leaders.
Before his Australia visit, Anthony was in Singapore where he agreed to allow Singapore's army to continue using Indian military training facilities for five more years, The Times of India reported.
The original agreement was signed for five years in 2008.
Singapore's air force has been using Indian facilities since October 2007. The deal was extended for five years during a visit to India by Singapore permanent secretary of defense Chiang Chie Foo in July.
Singapore, a city-state with limited space for military training, is the only country India allows to use its military facilities, The Times of India reported.
Notable deaths of 2014 [PHOTOS]