India and Indonesia took another step toward strengthening their strategic partnership with the recent signing of a memorandum of Understanding (MoU) between the Indonesian Chamber of Commerce and Industry (Kadin) and the Confederation of Indian Industry (CII).
Signed during the India-Indonesia Chief Executive Officer (CEO) Forum on January 26, 2025, the MoU aims to bolster cooperation across various key economic sectors, including healthcare, food, agriculture, manufacturing, energy, and technology. The event, held in New Delhi, witnessed the participation of notable officials, including India’s Minister of Commerce and Industry, Shri Piyush Goyal, and Indonesia’s Secretary-General of the Ministry of Communication and Digital, Ismail.
Anindya Bakrie, Chairman of Kadin, expressed optimism about the collaboration, stating, "A strategic collaboration between Indonesia and India is important for the economic growth of both countries." The signature moment was part of discussions on enhancing economic ties and ensuring both nations meet their ambitious goals for the global economy: India aiming to become the world’s third-largest economy and Indonesia targeting the seventh spot by 2030.
The collaborative efforts extend to several sectors. For example, Indosat and AIon OS India Private Limited plan to work together on Artificial Intelligence (AI) and digital talent development. Alongside, Indonesian firms like Mayapada Healthcare Group have partnered with Apollo Hospitals to innovate hospital operations and improve digital diagnostics.
Collaboration is not just limited to healthcare and technology. A strategic agreement also centers on pharmaceuticals and vaccines, where Indonesian firm Biotis and India’s Biological E intend to transfer technology for vaccine production, including the development of the Merah Putih Vaccine.
Hashim S. Djojohadikusumo, Indonesia’s Special Envoy for Climate Change and Energy, emphasized the significance of cooperation within the housing sector, particularly as the Indonesian government is currently engaged in building three million affordable housing units annually to aid low-income families. This initiative has opened doors for Indian construction companies to partake, with Djojohadikusumo announcing: "We welcome the participation of Indian construction companies in this project."
Historically, relations between India and Indonesia have oscillated, ranging from strong bonds to periods of tension. Both nations, founders of the Non-Aligned Movement, faced significant diplomatic strains post-1962, especially with Indonesia’s shifting allegiance toward Pakistan during India’s conflicts with China. Yet, under President Suharto during the 1970s, the maritime boundary settlement aided relations. The present challenge is to navigate their interests amid the growing assertiveness of China, especially within the Indo-Pacific region.
The growing influence of China adds urgency to their bilateral ties. India recognizes the necessity of firming up its naval capabilities and alliance with Indonesia as both nations bolster defense collaboration, particularly with mutual interests blending against maritime assertiveness from China.
Notable recent developments include increased military exchanges, illustrating the nations’ solidarity against regional threats. The commitment to the renewal of the MoU on Maritime Safety and Security Cooperation underlines the emphasis both leaders place on military preparedness and maritime safety—two pivotal issues amid rising tensions with China.
Further, as part of their collaboration, Indonesia has conveyed interest in acquiring BrahMos missiles from India, underscoring strategic military cooperation. Analysts believe strengthening this area is ideal, as Indonesia's substantial navy comprises over 65,000 personnel and various vessels to secure its extensive maritime territory, which resonates with India’s aspirations of becoming a leading blue-water navy.
The symbiotic relationship is also reflected culturally, with President Prabowo Subianto's light-hearted comments about having 'Indian DNA' and fondness for Indian music adding depth to their growing bond. The leaders have over four years of their current tenure to cultivate the relationship as the world continues to grapple with shifts toward multipolarity, particularly concerning the Indo-Pacific's future.
With bilateral trade estimated around $30 billion and both economies realizing the vast potential for growth, the recent agreements may well serve as pillars for future cooperation between these two populous nations. The recent CEO Forum symbolizes more than mere economic interests; it stands as testimony to both nations recognizing the importance of mutual growth, stability, and securing their respective places on the global stage.
Both countries are now poised to leverage their collective strengths as they navigate the multifaceted challenges presented by their regional environment. A more assertive partnership could reshape how India and Indonesia engage with global powers, underscoring the necessity for stability and cooperation across all sectors.