Published: 11:05 PM, 27 July 2026
New Strategic Ties With Indonesia
Shantanu Mukharji
In a bold and new move, India has reached out to Indonesia to bolster India and Indonesia’s existing strategic ties. Several significant pacts were inked between the two countries during Indian Prime Minister Narendra Modi’s visit to Indonesia (July 6 to 8, 2026). Strategists reckon that Modi’s visit significantly deepens India-Indonesia strategic partnership. The two largest Asian democracies signed 16 agreements covering a varied gamut of areas including defense, critical minerals, maritime connectivity, trade, education, health, and culture. Amongst the major defense and economic breakthroughs, Indonesia will now acquire BrahMos supersonic cruise missiles (~US$630 million) and Astra air-to-air missiles; new deals focus on critical minerals, steel joint ventures, and port development linking Sabang (Aceh) with India’s Andaman & Nicobar Islands to enhance maritime security and trade. This is seen as a major way ahead in the strategic ties between the two countries.Significantly, in the cultural field, Indonesia awarded Modi its highest civilian honor (Bantang Adipurna), PM Modi addressed the Parliament and visited Prambanan temple (with India pledging renovation help), and both sides further aim to boost bilateral trade from US$23.2 billion toward much higher levels in the coming years.
It is also worth mentioning that India and Indonesia have two thousand years of civilizational links and they are maritime neighbours, close friends and comprehensive strategic partners and are Asia’s largest democracies. Though it was not his first visit to Indonesia, PM Modi, this time, received a tumultuous welcome with more affection, closeness and greater respect in Indonesia. Indonesian President Prabowo Subianto, who is a close friend of Modi, personally received Modi at the airport and gave a warm send-off at the latter’s departure. This signals a natural warmth between the two leaders and their nations
Touching upon the defence agreement, the BrahMos procurement represents a major milestone in Indonesia’s long-standing effort to strengthen its coastal defense capabilities. While details of the contract’s value and delivery schedule have yet not been disclosed, the agreement transitions years of preliminary talks into an official pact. The Reuters news agency reported that the deal would be estimated around US$630 million.
In a simultaneous push for aerial modernization, state-owned Indian defense manufacturer Bharat Dynamics Limited (BDL) signed a cooperation agreement with Indonesia’s Republikorp for the procurement of Astra air-to-air missiles (AAMs). Speaking at the Merdeka Presidential Palace, PM Modi said the agreements reflect a shared geopolitical vision to secure critical maritime security interests.
On his part, President Prabowo also underscored the importance of strengthening the Indonesia-India Security Dialogue as both countries face evolving regional security challenges and unconventional threats. “As the challenges of transnational security issues increase, both the countries are now committed to deepening capacity development in modern and advanced technologies, combating transnational crime, and developing digital infrastructure,” according to President Prabowo.
Also, according to the Jakarta Globe news website, three out of the dozen Memoranda of Understanding (MoUs) from Modi’s talks with President Prabowo Subianto were related to critical minerals. One document zeroed in on working together on “minerals and technologies for the steel supply chain”. Steel Authority of India and Krakatau Steel — both state-owned entities — also agreed to set up a joint venture of an undisclosed value. There was an MoU between Non-Ferrous Materials Technology Development Centre (NFTDC), Midwest, and the nascent Perusahaan Mineral Nasional. Prabowo on his part, made no direct mention of the steel deal, but viewed “economic ties as a key pillar in bilateral ties”. To this end, Indonesia hopes to hasten the negotiations on a “Preferential Trade Agreement” (PTA) with India, according to Prabowo. A PTA typically enables lower tariffs for certain goods. It also deserves a mention that Indonesia commands the world’s largest reserves of nickel, the silvery-white metal key in steel production, reaching a whopping 62 million metric tons. Jakarta, however, has stopped exporting raw nickel ores and is restricting shipments to processed goods for a greater economic boost.
In another development, meriting to be reiterated that President Prabowo Subianto reaffirmed Indonesia’s commitment to strengthening maritime connectivity with India through the joint development of strategic ports in Sabang, Aceh, and the Andaman and Nicobar Islands. Speaking during a joint press statement with Modi at the Merdeka Palace in Jakarta on July 7, Prabowo said the two ports would serve as a strategic maritime link to deepen economic cooperation and strengthen bilateral relations between the two countries. Prabowo also hoped that stronger maritime connectivity would facilitate trade and investment, improve logistics, and promote greater people-to-people exchanges through enhanced regional mobility. He emphasized that Indonesia and India view economic cooperation as one of the key pillars of their bilateral partnership. He said both countries remain committed to expanding collaboration across various strategic sectors to generate tangible benefits for their peoples. At the same time, he expressed hope that the development of the maritime corridor would become a concrete step toward strengthening the Indonesia–India strategic partnership and enhancing cooperation across the broader Indo-Pacific region. Geographically, Sabang, located on Weh Island in Aceh, lies about 700 kilometers southeast of the Andaman and Nicobar Islands and approximately 160 kilometers from India’s Great Nicobar Project.
Both locations overlook the northern entrance to the Strait of Malacca, one of the world’s busiest maritime chokepoints through which a substantial share of global trade and energy shipments passes.
Importantly and crucially, Indonesia and India are also pursuing efforts to establish direct shipping routes between Sabang and the Andaman and Nicobar Islands while expanding cooperation in fisheries, rare earth minerals, and regional trade. It may be recalled that Indonesia and India bilateral trade was US$23.2 billion in 2025. India is a big buyer of Indonesia’s top products like coal, palm oil, rubber, paper and spices. There is a huge potential for reaching the bilateral trade to $550 billion in the next 10 years. Independent analysts feel that Modi’s visit to Indonesia was a huge success as it further strengthened the existing strategic ties between both the countries.
Shantanu Mukharji is a retired
IPS officer and former National
Security Advisor in Mauritius.
