India and Indonesia: A Strategic Alliance Shaping the Indo-Pacific Future

The recent visit of Indonesian President Prabowo Subianto to India, coinciding with the celebration of 75 years of the Indian Republic, underscores the deep historical and contemporary ties between the two nations. The moment was imbued with profound symbolism, harking back to the presence of President Sukarno, Indonesia’s founding father, as the chief guest at India’s first Republic Day parade in January 1950. This continuity of camaraderie, coupled with strategic intent, illustrates the evolving partnership between the world’s largest democracy and Southeast Asia’s largest economy, as both nations seek to expand their influence in an increasingly complex global order. 

The visit, marked by high-level diplomacy and ceremonial gravitas, demonstrated the weight Indonesia places on its relationship with India. President Subianto’s acceptance of India’s request not to proceed to Pakistan from New Delhi, an outcome of careful negotiations, highlighted Indonesia’s willingness to prioritize its ties with India over potentially contentious optics. The gesture not only showcased Indonesia’s diplomatic finesse but also underscored the importance of strengthening bilateral relations in the face of shared regional and global challenges.

Indonesia’s growing economic heft, being the largest economy in Southeast Asia and the 10th largest globally in terms of purchasing power parity, lends it a significant role in regional and global dynamics. Hosting the world’s largest Muslim population, Indonesia’s presence at India’s grand Republic Day celebrations carried additional symbolic weight, further amplifying the shared values of pluralism, cultural diversity, and mutual respect. 

President Subianto’s visit was far from ceremonial. Accompanied by a 100-member delegation comprising ministers, bureaucrats, and business leaders, the Indonesian President brought a clear message of intent. The signing of five memoranda of understanding during the visit laid the groundwork for enhanced cooperation in critical areas such as maritime safety, health, digital technology, and economic engagement. These agreements reflect a shared vision for deeper collaboration, with Indonesia recognizing India’s expertise in sectors like digital financial infrastructure and medical care, and India viewing Indonesia as a pivotal partner in the Indo-Pacific region. 

Economic ties remain a critical focal point of the partnership. While bilateral trade has reached $30 billion, the $24 billion trade deficit on India’s side reflects the dominance of Indonesian exports such as coal, mineral fuels, palm oil, and steel products. Bridging this gap requires diversifying the trade basket and enhancing market access. Prime Minister Narendra Modi’s emphasis on this issue during talks with President Subianto signals India’s resolve to address the imbalance. A significant step in this direction would be for Indonesia to reduce tariffs on automobile imports, potentially opening up new avenues for Indian automobile manufacturers already producing in Indonesia.

Geography, too, underscores the strategic importance of this relationship. The maritime boundary shared between India’s Andaman and Nicobar Islands and the Indonesian archipelago highlights the potential for enhanced maritime cooperation. Indonesia’s growing alignment with India’s Indo-Pacific Oceans Initiative (IPOI) underlines a shift in its approach to the Indo-Pacific, transitioning from earlier reticence to active engagement. With Indonesia playing a pivotal role in crafting ASEAN’s Outlook on the Indo-Pacific (AOIP), this alignment offers opportunities for joint projects in areas such as maritime resource management, infrastructure development, and disaster response.

The bilateral partnership’s growing depth is also evident in Indonesia’s recent membership in BRICS, a move actively supported by India. As members of this influential bloc, India and Indonesia have the potential to shape its agenda, leveraging their partnership to amplify their strategic heft within the group. While Indonesia’s economic ties with China remain significant, President Subianto’s emphasis on strategic autonomy offers scope for collaboration that transcends the shadow of Beijing’s influence.

Beyond bilateral ties, Indonesia’s engagement with regional frameworks and trilateral partnerships is gaining momentum. Under the leadership of Prime Minister Modi and President Subianto, there is potential to reinvigorate the existing India-Indonesia-Australia trilateral framework, leveraging platforms such as the Indian Ocean Rim Association (IORA) and IPOI. Additionally, Indonesia’s recent defense-related cooperation with Japan opens up the possibility of an India-Japan-Indonesia trilateral partnership, which could serve as a counterbalance to China’s growing assertiveness in the Indo-Pacific.

The success of this partnership also hinges on diplomatic rapport at the ministerial level. The working relationship between former foreign ministers Retno Marsudi and S. Jaishankar paved the way for effective collaboration during the consecutive G20 presidencies of Indonesia and India in 2022 and 2023. The challenge now lies in fostering a similar dynamic between Jaishankar and Indonesia’s new foreign minister, Sugiono. Building a strong ministerial relationship could provide the foundation for a high-profile Modi-Subianto partnership, taking the bilateral relationship to new heights.

Indonesia’s leadership in ASEAN and its evolving stance on the Indo-Pacific present additional opportunities for collaboration. While India and Indonesia do not always align on global issues, their shared interest in regional stability and economic growth provides a basis for deeper engagement. Inviting Indonesia to join the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) could further integrate it into India’s eastern neighborhood, fostering greater regional connectivity and cooperation.

The strategic significance of this partnership is underscored by the convergence of India and Indonesia’s aspirations on the global stage. Both nations seek to navigate an increasingly multipolar world with a focus on strategic autonomy, economic resilience, and regional stability. Leveraging platforms such as BRICS, the IPOI, and regional trilaterals, India and Indonesia have the potential to shape the strategic landscape of the Indo-Pacific and beyond.

As President Subianto and Prime Minister Modi chart a course for deeper collaboration, the India-Indonesia partnership stands at a pivotal juncture. It is no longer merely a relationship rooted in historical ties but a forward-looking alliance poised to address contemporary challenges and opportunities. Together, India and Indonesia can forge a future marked by shared prosperity, regional stability, and a more balanced global order.