India Indonesia Relations from Vajirao & Reddy Institute

INDIA INDONESIA RELATIONS

• Over the past 75 years, the bond between India and Indonesia has seen its ups and downs.
• A key moment came in 1950, when Sukarno, Indonesia’s first president, was the chief guest at India’s first Republic Day.
• As India celebrated its 76th Republic Day on 26 January 2025, Indonesian President Prabowo Subianto was invited as the chief guest, highlighting the continued strengthening of their diplomatic ties.

• What makes this year’s Republic Day even more special is the presence of the Indonesian President joined by a 152-member marching contingent and a 190-member band from Indonesia, marching alongside the Indian Armed Forces at the Republic Day Parade at Kartavya Path.
• This shows the unity between the two nations adds another chapter to the growing relationship between India and Indonesia, filled with promise for the years ahead.
• On January 25, 2025, India and Indonesia took another step forward by signing several important agreements in areas like maritime security, health, traditional medicine, culture, and digital cooperation during a meeting between P.M. Modi and Indonesian President Subianto at Hyderabad House in New Delhi.

• Shared Struggle Against Colonialism: India and Indonesia both fought against colonial rule in the 20th century. India’s support for Indonesia’s independence struggle against Dutch colonial control played a crucial role in the formation of strong bilateral ties.
• India’s Diplomatic Support: Under Prime Minister Jawaharlal Nehru, India was one of the first countries to support Indonesia’s independence from the Dutch. India provided humanitarian aid, diplomatic backing, and even took actions such as banning Dutch airlines from flying over India in 1947 as a sign of protest.
• Sukarno’s Visit to India: In 1950, President Sukarno of Indonesia visited India as the guest of honor at India’s Republic Day celebrations.
• This visit symbolized the strong bilateral ties between the two nations, with Nehru and Sukarno maintaining a close friendship rooted in their shared struggle against colonialism.
• Treaty of Friendship (1951): India and Indonesia signed the Treaty of Friendship in 1951, which aimed to establish "perpetual peace and unalterable friendship."
• This treaty reflected their shared commitment to non-alignment, anti-colonialism, and peaceful coexistence.
• Bandung Conference (1955): India and Indonesia were central figures in the Bandung Conference, which marked the birth of the Non-Aligned Movement (NAM).
• Both Nehru and Sukarno were founding members of NAM, advocating for political independence and economic self-sufficiency for newly independent countries, and fostering South-South cooperation between India and Indonesia.

• Differences on China: Initially, both India and Indonesia saw China as an ally in their anti-colonial struggle.
• However, the relationship began to diverge after India’s relationship with China soured following the 1959 Tibetan Uprising and the 1962 Sino-Indian War.
• Indonesia’s Continued Friendship with China: While India distanced itself from China after the 1962 war, Indonesia maintained its friendship with China, leading to tensions between India and Indonesia during the 1960s.
• Personal and Political Strains: The tension was not only due to political differences but also personal strains between Prime Minister Nehru and President Sukarno. Nehru’s refusal to support Sukarno’s idea of holding a 2nd Bandung Conference in the 1960s further escalated tensions.
• Indonesia-Pakistan (1965): During the 1965 India-Pakistan war, Indonesia supported Pakistan, which caused a significant rift. Indonesia’s Foreign Minister announced support for Pakistan, and Indonesia even supplied arms to Pakistan.
  • This support for Pakistan led to an attack on the Indian Embassy in Jakarta, marking a low point in bilateral relations.
• Political Change in Indonesia: In 1966, an attempted coup in Indonesia led to the weakening of Sukarno’s power and the rise of General Suharto. Suharto’s anti-communist stance and shift toward a pro-Western foreign policy helped restore and strengthen Indonesia’s relationship with India.

• Maritime Boundaries Agreement (1977): The 1977 maritime boundaries agreement marked the beginning of a more stable relationship between India and Indonesia. The two countries also cooperated on issues related to regional security and economic development during this time.
• Cold War Alignments: During the Cold War, India aligned itself with the Soviet Union, while Indonesia leaned toward the United States.
• This ideological and political divide created some challenges in bilateral cooperation, but the two countries maintained diplomatic and trade relations.
• Diplomatic Engagement: Despite ideological differences, both nations maintained regular diplomatic exchanges. Notable visits include Suharto’s visit to India in 1980, and Indian leaders such as Indira Gandhi and Rajiv Gandhi also visited Indonesia in the early 1980s.

• Economic Liberalization in India: In the early 1990s, under Prime Minister P.V. Narasimha Rao, India began its economic liberalization process, which included greater focus on Asia. The ‘Look East’ policy was introduced to strengthen India’s economic and political ties with Southeast Asia, including Indonesia.
• Regional Economic Growth: The 1990s saw Indonesia’s rapid economic growth, presenting India with opportunities for increased trade and investment. Bilateral cooperation expanded in various sectors, especially as both nations pursued economic modernization.
• Strategic Cooperation: As regional security concerns grew, particularly in the South China Sea, India and Indonesia strengthened their strategic cooperation. They conducted joint military exercises (e.g., Garuda Shakti) and started sharing intelligence, improving their defense ties.
• Multilateral Cooperation: India and Indonesia worked closely in multilateral forums like the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF), emphasizing regional stability and collaboration on global issues.

• Increased Defense and Security Cooperation: The 2000s saw both nations strengthening defense ties through regular joint military exercises and maritime security cooperation, particularly due to the strategic importance of the Indo-Pacific region for global trade and security.
• Bilateral Trade Expansion: By 2022, Indonesia became India’s 2nd-largest trading partner in ASEAN, with bilateral trade reaching $38.84 billion in 2022-23.
• Indonesia exports coal, crude palm oil, and oil to India, while India exports refined petroleum, vehicles, and steel products to Indonesia.
• Cultural Ties: There was a significant growth in cultural ties, including increased educational exchanges. Many Indonesian students studied in India, and there was a rise in tourism between the two countries.
• Leadership Exchanges: From the 2000s onward, each Indonesian president and Indian prime minister visited the other country, helping deepen ties in various areas, from trade to cultural collaboration.

• ‘Act East’ Policy: In 2014, Prime Minister Narendra Modi expanded the ‘Look East’ policy into the ‘Act East’ policy.
• This shift focused on practical, outcome-oriented cooperation, particularly in defense, connectivity, and economic growth, with a strong emphasis on the Indo-Pacific region.
• Ongoing High-Level Engagement: The January 2025 visit of President Prabowo Subianto to India highlighted the continued commitment to strengthening ties.
• The visit resulted in agreements covering maritime security, digital cooperation, traditional medicine, and defense industrial cooperation.
• Current Economic Ties: As of 2023-24, bilateral trade between India and Indonesia was valued at $29 billion.
• India imports coal and palm oil from Indonesia, while its exports include refined petroleum products, commercial vehicles, and machinery.
• Untapped Potential: Despite strong ties, experts believe there is still untapped potential in sectors like technology, infrastructure, and green energy. These areas could provide opportunities for further collaboration in the future.

• Maritime Security: Both nations are focused on maritime security in the Indo-Pacific, India and Indonesia cooperate on securing vital shipping lanes, which are increasingly important in the face of rising geopolitical tensions.
• Defense and Military Cooperation: India and Indonesia are enhancing their defense cooperation, including joint military exercises, defense technology sharing, and potentially collaborating on defense production.
• The agreements signed in 2025 indicate growing defense industrial cooperation.
• Regional Influence and Multilateral Platforms: Both countries are committed to ensuring regional stability and cooperation through multilateral platforms like the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF), strengthening their strategic roles in the Indo-Pacific.
• Economic Potential: The economic partnership between India and Indonesia continues to grow, with ample opportunities in sectors like renewable energy, technology, infrastructure development, and the digital economy. Both countries aim to boost trade further, with potential for new projects and investments.