Strengthening India-Indonesia Ties | 28 Jan 2025

Source: IE

Why in News? 

The President of Indonesia was the Chief Guest at India’s 76th Republic Day celebrations, marking the 75th anniversary of India-Indonesia diplomatic relations. 

• Both countries signed several MoUs covering areas such as health cooperation, digital infrastructure, and defence collaboration. 

What are the Key Highlights of the India-Indonesia Ties? 

• Comprehensive Strategic Partnership: Both leaders reaffirmed their commitment to elevating the bilateral relationship, which was upgraded to a Comprehensive Strategic Partnership in 2018. 
• Defence Cooperation: The leaders committed to strengthening defence ties through initiatives like Coordinated Patrol, Ex Garuda Shakti (Army), and Ex Samudra Shakti (Naval). 
  • Both agreed to establish Bilateral Maritime Dialogue and Cyber Security Dialogue. 
• Trade Cooperation: Both nations aim to boost bilateral trade, which reached USD 38.8 billion in 2022-2023, and agreed to resolve trade barriers and expedite the AITIGA review. 
  • The MoU on Local Currency Settlement Systems aims to boost trade by enabling transactions in local currencies. 
• Energy, and Health Security: Both nations are focusing on biofuels and joint exploration of critical minerals like nickel and bauxite. 
  • MoUs on Health Cooperation and traditional medicine Quality Assurance were signed, focusing on digital health and healthcare professional capacity-building. 
• Technological Cooperation: India offered to share its expertise in Digital Public Infrastructure, Quantum Communication, and High-Performance Computing with Indonesia. 
• Cultural Cooperation: India aims to assist in restoring the Prambanan Temple in Indonesia and reaffirmed the "Kashi Cultural Pathway" principles from the G20 Culture Ministers' Meeting. 
  • The Kashi Cultural Pathway aims to restore heritage structures and return cultural artifacts to their countries of origin. 
• Multilateral Cooperation: Both countries emphasized the importance of ASEAN centrality and cooperation on regional issues like the ASEAN Outlook on Indo-Pacific, India-Indonesia-Australia Trilateral and Indo-Pacific Oceans Initiative (IPOI), BRICS and Indian Ocean Rim Association (IORA). 

How India-Indonesia Ties Evolved Overtime? 

• Early Post-Independence Period (1940s-1950s): India, under Prime Minister Jawaharlal Nehru, strongly supported Indonesia’s fight for independence from Dutch colonial rule.  
  • The two countries signed a Treaty of Friendship in 1951, and cooperation in trade, culture, and military matters flourished.  
  • Both nations aligned on non-alignment, anti-colonialism, and peaceful coexistence, leading to their active participation in the 1955 Bandung Conference and NAM's formation in 1961. 
• Deterioration in Ties (1960s): Relations strained in the 1950s-60s as India’s ties with China worsened post-1959 uprising and Sino-Indian 1962 war, while Indonesia stayed cordial with China. 
  • In the 1960s, Indonesia sided with Pakistan during the 1965 India-Pakistan conflict, showing solidarity and providing military aid. 
• Cold War Era (1966-1980s): Under President Suharto, Indonesia moved away from its previous alignment with China and sought to rebuild ties with India. 
  • Indonesia and India improved ties with key agreements like the 1977 maritime boundary pact and Suharto's 1980 visit to India. 
• 'Look East' Policy 1991 (1990s): Under India’s ‘Look East’ policy 1991, trade grew and both nations evolved a comprehensive partnership covering economic, security, and cultural cooperation. 
  • India's 2014 ‘Act East’ 2014 policy strengthened ties with Southeast Asia, making Indonesia a key regional partner. 
• Recent Developments (Since 2000s): Indonesia is now India’s 2nd largest trading partner in the ASEAN region (1st-Singapore), and trade has grown significantly from USD 4.3 billion in 2005-06 to USD 38.84 billion in 2022-23. Indian investments in Indonesia amount to USD 1.56 billion. 
  • India and Indonesia jointly called for resolving maritime disputes and finalizing the South China Sea Code of Conduct as per international law, including UNCLOS. 
  • Indonesia is negotiating with India to acquire the BrahMos missile system, with a broad agreement on pricing, estimated at USD 450 million. 

Why is Indonesia Significant to India? 

• Strategic Importance: Indonesia occupies a pivotal position in the Indo-Pacific region, with control over key sea lanes such as the Strait of Malacca, Sunda, and Lombok, making it a critical partner in ensuring maritime security and the free flow of trade in the region.

• Natural Resources: Indonesia, rich in resources like palm oil, tin, rubber, cocoa, coffee, nickel, copper, timber, gold, and coal, is a key supplier for global markets and offers opportunities for India in energy, agriculture, and infrastructure. 
• Defense Cooperation: The potential USD 450 million BrahMos missile deal and growing defense ties highlight economic cooperation between Indonesia and India.  
  • Their defense partnership can address emerging challenges like cyber threats, maritime security, and counter-terrorism. 
• Politics and Governance: Indonesia, with the world’s largest Muslim population, practices secularism through its unique Panchashila Constitution. 
  • Indonesia has effectively tackled terrorism through consistent police efforts, avoiding military force. India can learn from this approach, given the shared challenges both countries face. 
• Global Influence: Indonesia's leadership in ASEAN strengthens its cooperation with India, crucial for regional stability and mutual interests. 
  • Indonesia, a regional pivot and emerging power in the Indo-Pacific, is a valuable partner for India. 

Conclusion 

Indonesia plays a vital role in India’s regional strategy, with strong ties in trade, defense, and maritime security. Both countries aim to deepen collaboration through technological, cultural, and multilateral efforts, bolstering their Comprehensive Strategic Partnership and reinforcing stability in the Indo-Pacific.