Indian Prime Minister Narendra Modi flew into Australia on Monday, aiming to strengthen economic ties by tapping into his country's fastest-growing diaspora.

Modi landed in Sydney, the last stop on his Asia-Pacific tour, looking to assert India's role as a regional power in the face of China's growing influence.

Indians are the second-largest diaspora community in Australia after the British, with 673,000 Indian-born citizens living in the country of 26 million.

"The diaspora is the most important bridge in the India-Australia bilateral business relationship," said Jodi McKay, national chair of the Australia India Business Council.

"Prime Minister Modi understood that long before Australia was able to grasp that," she told AFP.

Two-way trade between India and Australia was valued at Aus$46.5 billion (US$31 billion) last year and is likely to increase after a free-trade deal came into effect in December.

Australia and India hope to sign a broader economic pact this year, McKay said, as their ties have expanded beyond resources to areas such as renewable energy and technology.

US President Joe Biden had to cancel a planned summit in Australia so he could rush back to Washington and negotiate with Republican opponents on the US debt crisis.

That has left the stage in Sydney open to Modi.

- 'Euphoria' -

At Sydney's Qudos Bank Arena, organisers said 18,000 people were expected at an event Tuesday evening to welcome Modi, who is facing general elections back home next year.

"Look, there's going to be euphoria," said Jay Shah, a director at the India-Australia Diaspora Foundation, which is organising the show.

Asked about Australian media reports of divisions within India and the diaspora under Modi's Hindu nationalist BJP, Shah said he could not understand such claims being made of the world's largest democracy.

"We respect all the diverse views," he told AFP.

Prime Minister Anthony Albanese will attend the stadium event, addressing a crowd that few Australian politicians could muster, before hosting Modi at a summit on Wednesday.

Modi's trip comes as China expands its diplomatic, financial and military footprint in the Asia-Pacific region.

Over the weekend, the Indian leader joined a Quad summit in Japan with the leaders of the United States, Japan and Australia, aimed at countering Beijing's growing assertiveness.

Modi landed in Australia hours after holding a summit with 14 South Pacific states in Papua New Guinea -- the first visit to the Pacific nation by an Indian premier.

"We share your belief in multilateralism. We support a free, open and inclusive Indo-Pacific. We respect the sovereignty and integrity of all countries," Modi told Pacific leaders.