Will India-Indonesia Ties Take a Leap Forward in 2025?
Indonesian President Prabowo will be the chief guest at India’s Republic Day parade, a sign of the importance New Delhi accords its relations with Jakarta.
By
Rushali Saha
December 31, 2024
Earlier this month, the Indonesian President’s Office
confirmed that President Prabowo Subianto had accepted an invitation to be the chief guest at India’s Republic Day celebrations in January. This would be the fourth time for an Indonesian president to attend the event as a chief guest, including in 2018 when India hosted all 10 leaders of the ASEAN countries as chief guests.
It was Indonesia’s first President Sukarno who was the chief guest of India’s first Republic Day celebrations on January 26, 1950. New Delhi’s choice of Sukarno as the chief guest reflected the geopolitical realities of the time. Sukarno was a close ally of India’s Prime Minister Jawaharlal Nehru and a fellow advocate of independence for Asian and African countries. The two were later co-founders of the Non-Aligned Movement.
The subsequent
selection of guests for India’s Republic Day celebrations has been in tune with changes in India’s foreign policy priorities.
India has been
seeking to expand its footprint in Southeast Asia. Increased engagement with Jakarta is expected to be beneficial in this regard. Prabowo’s visit to New Delhi will be critical in gauging his administration’s policy goals and identifying areas of mutual cooperation.
Defense cooperation, specifically defense technology and arms procurement, is a key area of interest to India. In recent years, there has been a significant uptick in India-Indonesia defense ties. In February 2023, INS Sindhukesari became the
first Indian submarine to dock in Indonesia. More recently in April 2024, the first ever “India-Indonesia Defense Industry Exhibition-cum-Seminar” was
organized in Jakarta, which saw the participation of 36 prominent Indian defense companies, including 12 Defense Public Sector Undertakings (DPSU or SOEs) and 25 private companies, alongside several Indonesian state-owned defense enterprises and private defense establishments. On a recent visit to Jakarta, Indian Navy Chief of Staff Admiral Dinesh K. Tripathi discussed opportunities for increasing defense cooperation. Jakarta reportedly showed interest in
collaborating with India on defense technology, including on the
BrahMos cruise missile.
For years now, India and Indonesia have been negotiating the sale of BrahMos missiles to Jakarta, with
reports suggesting that both sides came very close to finalization of a deal in 2023.
Although Indonesia has significantly boosted
investment in the acquisition of new weapons, which increased by nearly 28 percent in 2021 and by 69 percent in 2022, Jakarta has remained
hesitant to purchase the BrahMos missiles. Despite being a more cost-effective option, Jakarta’s hesitation likely stems from possible U.S. sanctions under CAATSA, as the missiles are jointly produced with Russia. Although Washington has used the sanctions sparingly,
theoretically it applies to both the makers of BrahMos and any of their customers. Therefore, Jakarta fears that it could be subjected to U.S. sanctions if it purchases BrahMos from India.
The Prabowo administration is reportedly keen to strengthen Indonesia’s military capabilities, and is expected to significantly increase defense spending in the coming years. With space opening up, India should push to finalize the BrahMos deal with Jakarta.
Importantly, Southeast Asian countries are looking to diversify their arms suppliers. New Delhi should use this opportune moment to push arms sales in the region beyond traditional partners in Southeast Asia, beginning with Indonesia.
2025 will be a crucial year for India-Indonesia trade ties as well. In 2019, India and Indonesia set an ambitious target of achieving
$50 billion in bilateral trade by 2025, However, trade in fiscal year 2023-24 stood at only
$26.69 billion. Although in 2023 Indonesia emerged as India’s
largest trading partner in the ASEAN region, high tariff and non-tariff barriers were major
constraints on India-Indonesia trade. Negotiations for the India-Indonesia Comprehensive Economic Cooperation Agreement (CECA) have been ongoing since
2011, but with limited progress. Concerted effort toward resuming dialogue is the need of the hour and Prabowo’s visit could be a good starting point for setting this in motion for the upcoming year.
According to Indian media
reports, development of the Sabang port is likely to be discussed during Prabowo’s visit. In
2018, during a visit between Modi and Indonesian President Joko Widodo, India pledged assistance in the development of infrastructure on Sabang and both sides agreed to set up a
task force to enhance connectivity between Andaman and Sabang.
The successful development of the Sabang port — located strategically at the northern tip of Sumatra — will give New Delhi easier access to the Malacca Strait and support short-sea shipping in the Bay of Bengal. It will also boost the Indian Navy’s ability to act as the first responder to non-traditional security challenges in the eastern Indian Ocean. Developing connectivity between Andaman and Aceh is crucial to unleash the economic potentials of both areas, which can become key transshipment hubs for container traffic passing from East and Southeast Asia.
In 2023, India and Indonesia completed a joint
feasibility study on developing Sabang port, but overall progress on building the port has been slow. The same year, Adani Group was reportedly in
talks with the Indonesian government to develop the port. The outcome or progress of the talks remains unclear; however, the global
backlash against Adani Group’s overseas projects, following a U.S. indictment alleging bribery, casts a shadow over India’s plan to develop the port.
Despite these challenges, there is optimism over the future of India-Indonesia ties in both countries. Considering the current reality and the future potential of their relationship, the two nations must work toward a focused, sustained, and multi-sectoral effort to elevate their ties to a higher level.
Indonesian President Prabowo will be the chief guest at India’s Republic Day parade, a sign of the importance New Delhi accords its relations with Jakarta.
thediplomat.com
