Indonesia and India are among the world’s top democracies and economies, and as next-door neighbours in the Indian Ocean, have a vast canvas on which to paint their linked stories of dialogue, cooperation, and mutually beneficial partnership. Despite a splendid beginning in connecting with each other at the dawn of Indonesia’s independence 75 years ago, the two nations drifted away. But in recent years, they have returned to a shared path, and since 2018, have been engaged in forging their Comprehensive Strategic Partnership. These endeavours arrived at an important milestone in the January 2025 State Visit of Indonesian President Prabowo Subianto to India.
In the mission to deepen and diversify their relationship, the two governments have stepped out of their past, and brought in fresh thinking. A new Track 1.5 dialogue, conceived and conducted by scholars, officials, industry leaders, and experts, was launched in September 2024 in close partnership with India’s Gateway House in Mumbai and Indonesia’s prestigious think tank, the Centre for Strategic and International Affairs (CSIS) in Jakarta.
At a two-day conclave in Mumbai in September 2024, participants developed a practical blueprint of ideas, proposals, and plans for a serious rejuvenation of the India-Indonesia relationship. The outcome of that dialogue was put into paragraph six of the official joint statement at the conclusion of President Prabowo’s Republic Day visit to India, which acknowledged and appreciated the effort made in Mumbai, India’s financial capital. “The leaders noted,” it said, “that enhancing engagements between think tanks and academia would strengthen their efforts to identify new horizons for bilateral ties.” The entire gamut of bilateral relations within the framework of the Comprehensive Strategic Partnership was reviewed at the top leadership level.
In this backdrop, CSIS and Gateway House will hold a second Dialogue in Jakarta on September 15-16, 2025.
The goal of these non-government dialogues is to seek a transformation of the two nations from the companion souls of Rabindranath Tagore’s 1927 journey to Java (Indonesia) into geopolitical, geostrategic, and geoeconomic partners of today. The potential is enormous bilaterally, regionally and globally. The two countries can increasingly assist each other in expanding their presence on the global stage, given their status as the largest and third-largest democracies, as well as being two significant power poles in the emerging multipolar world.
Both countries face rising geopolitical rivalries and see multilateralism and regional groupings as a strength. Both are dependent on affordable fossil fuels for energy, and face hurdles in the green transition. Both have ambitious developmental goals.
The two nations can learn domestically from each other’s developmental successes. At home, Indonesia has seen wins through its positive policy and practice to accept foreign investment, such as from Japan, which builds up local manufacturing capability, supply chain resilience and job growth. This has useful lessons for India. Indian companies focus on selling their products, not investing in foreign markets. Without changing their strategies, Indian companies are unlikely to succeed in pushing up bilateral exports to Indonesia. India’s tech and health sector has created a unique competitive edge that Indonesia can benefit from. A specific learning from India is its successful mid-day meal scheme in schools to enhance childhood nutrition – which President Prabowo has begun to introduce in Indonesia. Multilaterally, the two nations must deepen their collaboration in various multilateral fora, such as the G20, IORA, and now BRICS, which Indonesia has just joined, as this grouping came into the crosshairs of the new U.S. administration of President Donald Trump
In Mumbai, trade was discussed in detail. Indonesia is an experienced trading nation, and a central partner in ASEAN which, in 1967, it co-founded. India is just re-entering global trading regimes, after a hiatus of 75 years; learning about negotiations and managing trading networks from Indonesia will be an advantage, even as India seeks to review its own India-ASEAN free trade agreement.
In defence, Indonesia is in talks to acquire India’s successful BrahMos missile, which will help modernise Indonesia’s navy and open up new cooperation with India so they can collaborate to better navigate common geopolitical challenges, especially in the Indo-Pacific.
Most important are people-to-people ties, with centuries-old cultural connections and two millennia of sea-faring trade. Mumbai and Jakarta share a 200-year history of trade in spices where transnational networks of Indian spice and cloth merchants marked both cities with their business, culture, and faith. The 1955 Bandung Conference, which brought together the newly independent Asian and African nations, began with great hope, but within a decade, the economies of the decolonised states were grappling with economic instability, and lost their momentum.
Consequently, the associations have been lost. Maps in Indonesian textbooks typically exclude India, cutting off the view to the west at Thailand and Sumatra. Indonesian scholars regret this “mental map” that overlooks India’s proximity – the Andaman and Nicobar Islands of India are just 160 km away from Sabang in Indonesia’s Aceh province.
These are the affinities that are now ready to be revived. India and Indonesia have a shared love of textiles and its traditions; a joint creative economy can integrate new technologies and sustainable practices for textiles. Indonesians loved Bombay’s silent films and have continued the craze for Indian cinema and TV serials, which today can focus on the shared heritage of the two countries.
In hard infrastructure, India can access Indonesia’s abundant critical minerals, and Indonesia can be refining base for Indian companies importing lithium from Australia – a trusted trading partner for both countries which are already building cooperation in the India-Indonesia-Australia trilateral format. The trilateral has already been endorsed by Modi and Prabowo in January; they welcomed “the ongoing cooperation under the India-Indonesia-Australia trilateral format” to address common challenges and opportunities for collaboration.India’s booming stock exchange can be linked with Indonesia’s, and its vibrant investor and venture community can fund investments there. The bilateral trade does not reflect this potential. At $30 billion in 2024, trade is an underperformer, and far off from their goal of reaching $50 billion by 2025[1]. The leaders should now set an ambitious target to accelerate bilateral trade to $80 billion within the next three to four, with an aspirational goal of $100 billion by 2030.
The world has changed considerably since the Prabowo visit. The U.S. government’s foreign, economic, and trade policies have created new volatility and uncertainty, with growing divides within the Atlantic Alliance, the failure of all diplomatic efforts to bring peace in Ukraine and the West Asia region, and the impact of U.S. tariffs on a host of nations, including Brazil and India. Under these circumstances, Indonesia has performed somewhat better and may, therefore, have some advice to share with New Delhi. In this shifting world order, the India-Indonesia bilateral is ripe for collaboration and reconnection, in better and more diverse ways, both through official and non-official channels. The challenge ahead is to boldly develop consensus on contemporary issues and persuade the two establishments to implement their plans and decisions promptly and effectively.
Rajiv Bhatia is the Distinguished Fellow for Foreign Policy Studies, and a former ambassador.
Manjeet Kripalani is the Executive Director, Gateway House.
This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.
Support our work here.
For permission to republish, please contact outreach@gatewayhouse.in
©Copyright 2025 Gateway House: Indian Council on Global Relations. All rights reserved. Any unauthorised copying or reproduction is strictly prohibited.
References:
[1] https://www.ibef.org/indian-exports/india-indonesia-trade