India, Indonesia Get Closer – Analysis


By Rajeev Sharma

Indonesia and India are the two largest Muslim populated countries in the world in that order. Both are members of G20 and have robust economies – India having a GDP of $ 1.8 trillion and Indonesia’s GDP pegged at $ 700 billion, thus a combined GDP of $ 2.5 trillion. Both countries are China-wary and are affected by the scourge of terrorism. Both were among the founding members of Non Aligned Movement wherein India’s first Prime Minister Jawahar Lal Nehru and Indonesia’s first President Sukarno made solid contributions to NAM. Nehru and Sukarno shared a vibrant personal rapport, reflected by the fact that Sukarno was the Chief Guest at India’s first Republic Day parade in 1950. But as NAM gradually became irrelevant in decades to follow, the two nations drifted apart. But no longer.

The India-Indonesia engagement has started all over again and this time the ties have become so deep and wide-ranging that they are unlikely to become a casualty of the vagaries of fast-mutating international politics. The two countries started getting closer again with the dawn of the 21st century. In 2005, they signed a Strategic Partnership agreement and came up with a new action plan to boost their strategic ties two years later. Indonesian President Susilo Bambang Yudhoyono visited India from January 24-26 and took the bilateral relations between the two Asian neighbours from strength to strength. Yudhoyono held delegation-level talks with Prime Minister Manmohan Singh in New Delhi’s Hyderabad House on January 25 and the two leaders discussed ways of further invigorating their robust bilateral ties..

The importance India attaches to Indonesia can be gauged by the fact that the Indonesian President was the Chief Guest for this year’s Republic Day Parade, six decades after an Indonesia President was bestowed this honour. Inviting a foreign dignitary for becoming the Chief Guest at India’s Republic Day parade is an honour that New Delhi has for years been reserving for select nations with which it intends to step up its strategic ties.

The Indonesian President unequivocally condemned terrorism “in all its forms and manifestations”, a far cry from Chinese Premier Wen Jiabao’s complete silence on the subject during his recent India visit. Recognizing the common threats to national security from transnational crimes, including international terrorism, the President of Indonesia and the Prime Minister of India resolved to significantly enhance bilateral cooperation in combating terrorism. The two leaders resolved to commit their countries in improving sharing of intelligence, the development of more effective counter terrorism policies, enhance liaison between law enforcement agencies, provide assistance in the areas of border and immigration control to stem the flow of terrorist related material, money and people and specific measures against transnational crimes, including international terrorism through the already existing mechanism between Indonesia and India. The two leaders desired that the next meeting of the Joint Working Group on Counter-Terrorism should be held in the first half of 2011.

A new thing was that the two leaders decided to have summit level meetings on the sidelines of multilateral events, which would inevitably lead to annual bilateral summits between the two powers. The two leaders also announced the establishment of an Eminent Persons’ Group (EPG) to prepare a blue print of India-Indonesia relations over the next 15 years. A Joint Statement issued at the end of Singh’s talks with Yudhoyono said the two leaders noted the development of active cooperation through numerous frameworks governing defence, science and technology, space cooperation, agricultural science, culture, tourism, and youth affairs and sports. The two leaders also acknowledged cooperation in education, media, air services, energy resources including oil, gas, coal, and renewable energy, prevention of smuggling, prevention of illegal trade in narcotics, disaster management, cooperation in the area of small and medium enterprises, meteorology, climatology and geophysics including climate change, health, marine and fisheries.

During this visit, India and Indonesia signed 18 business Memoranda of Understanding worth $ 15.1 billion in a wide range of areas as diverse as infrastructure, manufacture and mining and none other than the visiting Indonesian President announced it in a business meeting of captains of industry here from both sides. During Yudhoyono’s talks with Prime Minister Manmohan Singh, the two leaders expressed satisfaction at the growing trade and investment ties between the two countries and set a new target for raising the bilateral trade volume to $ 25 billion by 2015, an achievable target as India-Indonesia trade has tripled in last five years and the current bilateral trade is pegged at $ 10 billion. Yudhoyono also highlighted the fact that India’s investment in Indonesia has grown from $ 11.6 million in 2007 to $ 44 million in 2010 and invited Indian industry to invest in his country as it offers conducive industrial environment with handsome return on overseas as well as domestic investments Anand Sharma, Union Minister of Commerce and Industry, said India has emerged as an attractive destination for outsourcing of IT products and services from across the world, with its vast resources of high quality and creative, engineering, technological and management manpower.

India and Indonesia have taken a timely step to deepen their synergies and intensify all-round cooperation in all important spheres, including defence cooperation. The India-Indonesia dialogue is important considering bouts of assertive diplomacy and flexing of military muscle which China has engaged in for last couple of years.

(The writer is a New Delhi-based journalist-author and a strategic analyst. He can be reached at [email protected])


SAAG is the South Asia Analysis Group, a non-profit, non-commercial think tank. The objective of SAAG is to advance strategic analysis and contribute to the expansion of knowledge of Indian and International security and promote public understanding.

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