Do I have to be outside Australia to apply for and be granted the subclass 400?

The subclass 400 is structured as a visa you typically apply for from outside Australia, and you are generally expected to be offshore both when you lodge and when the visa is decided.

This matters for timing. You should apply with enough lead time before your intended travel, since the visa needs to be granted before you enter Australia to do the specialised work.

If you are already in Australia on another visa, the 400 may not be the right option, and you should check whether a different temporary work visa fits your situation.