India and Indonesia Strengthen Partnership Amid Uncertainty in the Global Order

JAKARTA — Relations between India and Indonesia are increasingly demonstrating their strategic relevance amidst increasing global geopolitical uncertainty. One of the most visible symbols of this partnership was the presence of President Prabowo Subianto as Guest of Honor at last year’s Republic Day Parade at the invitation of Prime Minister Narendra Modi. Along Kartavya Path, New Delhi, a contingent of Indonesian defile and marching bands totaling 352 personnel took part, marking the first time the Indonesian contingent had appeared in a national day celebration abroad.

This momentum is not just ceremonial. President Prabowo’s presence marks the culmination of the 75th anniversary of India-Indonesia diplomatic relations and also reminds of the long history of the two countries, when President Sukarno was the Guest of Honor on India’s first Republic Day seven decades ago. Indonesia’s joining BRICS in January 2025 further strengthens the strategic dimension of bilateral relations, especially when India holds the Chair of BRICS in 2026 and prepares to host the BRICS Summit with the theme Building Resilience, Innovation, Cooperation and Sustainability.

Strategic Partnerships with Global Relevance

One year after the historic visit, India and Indonesia are at an important point to reflect on the achievements they have achieved while reaffirming the strategic vision agreed upon by the leaders of the two countries.

As the two countries with the largest populations in the world, India and Indonesia have responsibilities that go beyond mere national interests. The policy choices of the two countries have an impact not only on the region, but also on the Global South, especially amidst increasing geopolitical rivalry and changes in the international order. With a tradition of strategic independence and commitment to multipolarity, the India–Indonesia partnership not only serves bilateral interests, but also acts as a constructive balancing force for global stability. Closer cooperation will reduce external dependence and strengthen sovereignty and long-term strategic resilience.

Indonesia’s Reform and Economic Resilience Agenda

In the midst of global economic pressures, including investment fluctuations and the increasing frequency with which trade policies are used as geopolitical instruments, India and Indonesia remain consistent in implementing their domestic reform agenda. One of the common goals is to strengthen the role of the manufacturing sector as a driver of economic growth.

Under President Prabowo’s leadership, Indonesia has launched a number of strategic reform initiatives. The formation of Danantara is an important structural step with long-term impacts on economic governance. The Free Nutritious Meal Program is starting to show real social benefits, while the development of the Red and White Cooperative is expected to become a driving force for the rural economy. In a relatively short time, Indonesia has also recorded progress towards food self-sufficiency by reducing dependence on rice imports. On the other hand, the completion of a number of free trade agreements and efforts to dismantle artificial trade barriers reflect Indonesia’s increasingly open economic policy direction.

India welcomes the opportunity to partner with Indonesia on various Asta Cita priorities, especially in the areas of food security and digital transformation.

India’s Sustainable Economic Transformation

Across the Indian Ocean, India’s economic transformation continues to accelerate. After needing six decades to reach a GDP of 1 trillion US dollars, India managed to surpass the 4 trillion US dollar mark in 2025 and is projected to reach 5 trillion US dollars in the next two years. India has also surpassed Japan as the world’s fourth largest economy and is expected to overtake Germany in 2028.

This achievement was driven by consistent structural reforms, large investments in infrastructure, expansion of the digital economy, as well as strengthening the manufacturing, innovation, startup and research sectors. The passage of the SHANTI Act opened up new opportunities in the energy sector, including the utilization of nuclear energy through small modular reactors and an increased role of the private sector.

Capital Markets as a New Pillar of Economic Cooperation

Apart from trade and direct investment, capital markets are increasingly becoming an important pillar in strengthening India–Indonesia economic relations. Both countries have dynamic capital markets, with a growing domestic investor base and increasing global investor interest in financial instruments in Asia.

India has built an increasingly deep and liquid capital market ecosystem, supported by the digitization of trading systems, increased transparency and strengthened regulations. India’s experience in expanding retail investor participation, encouraging bond market deepening, and developing long-term financing instruments are valuable lessons for Indonesia.

For Indonesia, financial sector and capital market reforms play an important role in supporting national development financing, including infrastructure projects, energy transition and industrial downstreaming. Increased cooperation between capital market authorities, stock exchanges, and financial industry players in the two countries opens up opportunities for knowledge exchange, joint financial product development, and increased portfolio investment flows that are more stable and long-term.

Along with broader financial integration, capital markets can also be a means of strengthening India–Indonesia economic connectivity in regional and global frameworks, including through BRICS and financial cooperation initiatives across developing countries.

Expansion of Trade and Digital Connectivity

Various policy reforms carried out by India include tax rationalization, simplification of labor regulations, strengthening the maritime economy, and support for MSMEs. India has also adopted a more open approach to trade through concluding a number of free trade agreements and reducing protectionist policies.

Behind the dominance of the tariff narrative in global discourse, the facts show that India is one of Indonesia’s main export destinations, while Indonesia remains an important trading partner for India. Completing the revision of the ASEAN–India Goods Trade Agreement and initiating discussions on bilateral trade agreements are still strategic agendas that need to be completed together.

Cross-Sector Cooperation Towards the Future

Since the president’s visit, concrete cooperation has developed in various strategic sectors, including digital technology, health, financial integration, energy, food security, defense, education and culture. In the field of digital and artificial intelligence, Indonesia plays an active role as co-chair of the Economic Growth and Social Benefits Working Group at the AI ​​Impact Summit.

In the health sector, the partnership between Apollo Hospitals and Mayapada Hospitals aims to provide international standard health services in Indonesia. In the field of education and culture, initiatives to provide world-class educational institutions are being prepared, while cooperation in preserving cultural heritage includes the restoration of the Prambanan Temple by the Archaeological Survey of India.

Walking the Path Forward Together

Based on vision Advanced India 2047 And Golden Indonesia 2045India and Indonesia as Comprehensive Strategic Partners not only strengthen existing cooperation, but also open new spaces for collaboration in the fields of space, defense, critical minerals, and financial and capital markets. With solid economic performance, continued commitment to reform, and inclusive development, both countries are in a strong position to face global geopolitical dynamics together with greater resilience and confidence.

This article was written by Sandeep Chakravorty, Indian Ambassador to Indonesia.

This Press Release was also published on VRITIMES