Published: 12:05 PM, 17 August 2026
Security Cooperation Forms Strongest Pillars of Jakarta-Sydney Ties
Indonesia and Australia have developed a broad and increasingly strategic bilateral relationship based on geographical proximity, economic interests, security cooperation and strong people-to-people connections. As two influential countries in the Indo-Pacific, their partnership has become increasingly important for regional peace, stability and economic development.
Indonesia and Australia established diplomatic relations in 1949. Since then, their relationship has expanded from traditional diplomatic contacts to cooperation in trade, investment, defence, education, development, maritime affairs, climate action and regional diplomacy. The two countries elevated their relationship to a Comprehensive Strategic Partnership in 2018, providing a framework for broader and deeper cooperation.
Security cooperation is one of the strongest pillars of the relationship. The 2006 Lombok Treaty established a framework for security cooperation and reaffirmed both countries' commitment to sovereignty, territorial integrity and political independence. In February 2026, Indonesia and Australia signed the Treaty of Jakarta on Common Security, marking another significant step in their defence and strategic relationship. Australian Prime Minister Anthony Albanese described the agreement as a reflection of the close friendship and deep trust between the two countries.
Economic relations are equally important. The Indonesia-Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, entered into force in July 2020 and provides the principal framework for expanding trade and investment. Under the agreement, 99 per cent of Australian goods by value are scheduled to enter Indonesia duty-free or under significantly improved preferential arrangements. The agreement also supports stronger value chains and greater cooperation between businesses in both countries.
The scale of economic ties has grown substantially. Australia reported that Indonesia was its ninth-largest two-way trading partner in 2024-25, with trade valued at about A$34.83 billion. Indonesia is an important market for Australian agricultural products, minerals, energy, education and services, while Indonesian businesses and consumers increasingly engage with Australian food, healthcare, tourism and educational services.
The launch of Katalis 2.0 in July 2026 has provided fresh momentum to economic cooperation. The program is designed to strengthen implementation of IA-CEPA, expand trade and investment opportunities, improve institutional capacity and promote more inclusive economic growth. Both governments have described the initiative as a way to build economic resilience and create greater opportunities for businesses in the two countries.
Education and people-to-people links form another important foundation of bilateral relations. Thousands of Indonesian students study in Australia, while academic institutions in both countries cooperate in research, training and professional development. In 2025, around 24,000 Indonesians were studying in Australia on student visas. Such educational exchanges help young people develop a better understanding of each other's societies and strengthen long-term relations.
Development cooperation is also significant. Australia remains an important development partner for Indonesia, supporting programs related to sustainable economic transformation, climate resilience and stronger institutions. Australia's estimated bilateral development assistance to Indonesia for 2026-27 is A$308.6 million. Cooperation in these areas is intended to support Indonesia's development goals while contributing to greater stability and prosperity in the wider region.
Climate change and the transition to a low-carbon economy are emerging areas of cooperation. Both countries recognize the importance of sustainable economic growth, renewable energy, climate resilience and new technologies. Their economic relationship gives them opportunities to cooperate on clean energy, green investment and sustainable infrastructure while responding to global environmental challenges.
Maritime cooperation is another natural area of partnership because both nations are major maritime countries located at the crossroads of the Indian and Pacific Oceans. They share interests in protecting maritime security, combating illegal activities at sea and maintaining freedom of navigation. Cooperation in these areas is especially important as regional strategic competition increases.
Despite the strength of the relationship, challenges remain. Differences over particular political or economic issues can occasionally create tensions. Trade barriers, investment regulations and differing domestic priorities require regular consultation. Both countries must also ensure that their growing strategic cooperation remains based on mutual respect and recognition of each other's national interests.
The Comprehensive Strategic Partnership Plan of Action for 2025-2029 provides a roadmap for addressing these challenges and expanding cooperation. It identifies economic development, people-to-people connections, regional security and other areas as priorities. The plan also emphasizes cooperation in agriculture, education, infrastructure, resources, finance and the digital economy.
Indonesia and Australia therefore have strong reasons to deepen their partnership. Indonesia's position as Southeast Asia's largest economy and Australia's advanced economy and resources complement each other in many fields. Their cooperation can contribute not only to bilateral prosperity but also to a peaceful, stable and economically dynamic Indo-Pacific.
The future of Indonesia-Australia relations will depend on sustained political dialogue, increased trade and investment, stronger educational exchanges and closer security cooperation. With mutual trust and practical engagement, the two neighbours can transform their geographical proximity into a lasting strategic advantage.
At a time of rapid geopolitical and economic change, a strong Indonesia-Australia partnership is increasingly valuable. Their relationship has moved well beyond traditional diplomacy and now represents a comprehensive partnership involving governments, businesses, universities and ordinary citizens. Continued cooperation can help both countries meet shared challenges and build a more secure and prosperous future for the Indo-Pacific region.
