Editorial: New Delhi deepens ties with trusted ally Indonesia
Prime Minister Narendra Modi’s Indonesia visit is expected to accelerate defence, trade and critical minerals agreements, reinforcing India-Indonesia strategic ties in the Indo-Pacific.
As China flexes its muscles through increasingly aggressive maritime posturing, regional powers in Southeast Asia are recalibrating their strategies and diversifying their security partnerships. The diminishing focus of the United States on this region has further added to their anxiety. This shifting geopolitical trend presents a significant opportunity for India to strengthen partnerships in the region, particularly with Indonesia, with which it shares a long civilisational bond. Prime Minister Narendra Modi’s ongoing visit to Jakarta, as part of his six-day tour that also includes Australia and New Zealand, is expected to make significant progress in deepening economic, defence, and strategic ties. As the world’s largest archipelago, Indonesia straddles the Malacca, Sunda, and Lombok Straits, the key maritime crossroads between the Indian and Pacific Oceans. For India, whose trade and energy supplies depend heavily on these sea lanes, Indonesia is not merely an ASEAN partner but a pivotal Indo-Pacific nation. The two democratic countries, collectively home to nearly two billion people and among the world’s most consequential maritime nations, can emerge as joint architects of a new Indo-Pacific security order to counter Beijing’s growing influence. Two important outcomes are expected from Modi’s visit: a defence cooperation agreement on the sale of Brahmos missiles to Jakarta and firming up agreements on critical minerals. Indonesia is rich in key critical minerals such as nickel, a key component of EV batteries and electric vehicles. Incidentally, China controls about 75% of Indonesia’s nickel refining capacity.
Nickel is a key critical mineral for India’s transition to cleaner energy technologies. India imports more than 80% of its ferronickel, an alloy of iron and nickel essential for steel production, from Indonesia. Nickel is also a crucial material for lithium-ion batteries used in EVs. India currently meets its entire domestic demand for EV battery materials through imports. The long-delayed India-Indonesia Comprehensive Economic Cooperation Agreement (CECA) is expected to be finalised during Modi’s visit, his fourth to Indonesia, and his first state visit since 2018, signalling the growing bilateral relationship. India’s ties with Indonesia have acquired greater depth since the 2018 Comprehensive Strategic Partnership, through expanding defence exchanges, coordinated naval activities, and growing cooperation in maritime domain awareness. Indonesia’s importance in global critical-mineral supply chains, particularly nickel, adds a significant dimension to discussions expected to review cooperation in defence, maritime security, trade, energy, space, pharmaceuticals, and connectivity. As India seeks resilience in battery manufacturing and electric-vehicle supply chains, cooperation with Indonesia assumes growing importance for India’s clean energy transition. Indonesia is India’s second-largest ASEAN trading partner, but economic ties remain below potential. India runs a trade deficit of about $20 billion. The two governments aim to expand bilateral trade to $100 billion by 2030. India increasingly views Indonesia as a key maritime partner connecting the Indian and Pacific oceans.
