By Ambassador Sandeep Chakravorty
Exactly one year back President Prabowo was the Chief Guest at India’s Republic Day Parade at the invitation of Prime Minister Modi. Marching down the majestic Kartavya Path, Delhi’s most magnificent promenade was a 352 strong Indonesian marching & band contingent. It was the first time that an Indonesian contingent had participated in a national day parade abroad. That it was to commemorate the culmination of the celebrations of 75 years of establishment of diplomatic relations and President Sukarno being the Chief Guest at India’s first Republic Day, seventy five years ago, made the occasion symbolic and poignant. In January 2025, Indonesia also joined BRICS, adding yet another layer to our ties. India holds the BRICS Chair in 2026 and is looking forward to warmly receive President Prabowo for the BRICS Summit later this year on the theme of Building for Resilience, Innovation, Cooperation and Sustainability.
As a year has passed since the momentous visit, it is time to take stock of our ties and spell out the outcomes and roadmap that the leaders of the two nations had charted. Decisions and actions taken by India and Indonesia, the largest and the fourth largest countries of the world, hold importance and impact for the world, particularly for the Global South, in times of acute geopolitical contestations and upending of the international order. As non-block, non-allied countries, with firm belief in multi-polarity, India-Indonesia partnership is not only designed for greater bilateral benefit and dovetails well with either country’s foreign policy approaches, but is also balancing force for global good, in a world being pulled apart by competing ideologies. It is without doubt that if India and Indonesia do more with each other, our dependencies on others would reduce preserving our sovereignties and strategic autonomies.
Despite the challenges both countries face due to adverse global economic conditions including weaponisation of tariffs and investment wariness, both countries have understood the importance of domestic reforms and perseverance. Going ahead both countries have taken initiatives to increase the share of manufacturing in their respective GDPs. In the context of Indonesia, the most remarkable and courageous reform measure, which will have far-reaching outcomes, is the establishment of Danantara. Another bold initiative has been the Free Nutritious Meals Scheme, the impact of which is both transformational and generational; and already visible. The Merah-Putih Cooperatives when fully operational will be the hubs for growth in the rural economy. Since President Prabowo assumed office, in a short time of about a year, Indonesia has made strides in food self sufficiency and perennial rice imports have now become a thing of the past. Indonesia has also finalised several FTAs and has seen merit in dismantling artificial barriers to trade. India is delighted to partner with Indonesia in several of the Asta Cita initiatives of the government including in food security and digitalisation.
On the other side of the shared Indian Ocean that has acted as a bridge between our two civilisations for ages, the Indian growth story is not only intact but gaining steam. It took India 60 years since independence to reach a GDP of US$ 1 trillion. India achieved a GDP of US$2 trillion in another 7 years in 2014. Thereafter India achieved US$3 trillion in another 7 years in 2021 and then achieved US$4 trillion in another just 4 years in 2025. India is likely to become a US$ 5 trillion GDP in another 2 years. It took India 60 years to transition to lower-middle income in 2007 from low-income country. India is set to touch US$ 4000 per capita in another 4 years in 2030 to transition to an Upper Middle Income country and join China and Indonesia at current classification. Recently, India surpassed Japan to become the 4th largest economy in the world. By 2028 it will surpass Germany to become the 3rd largest economy after US and China. This internal transformation in India, fuelled by strong emphasis on structural domestic reforms, high spending on infrastructure, massive digital expansion, and emphasis on manufacturing, StartUps and R&D along with innovation are the key drivers of India’s growth. With the recent promulgation of SHANTI (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) Act, new pathways for utilisation of nuclear energy including by installation of small modular reactors (SMRs) and greater private sector participation have emerged.
Much like Indonesia, India too has exhibited perseverance and adherence to the reform agenda. The Modi Government has over the past year, rationalised taxation – both direct and indirect; consolidated 29 disparate laws into 4 labour codes; increased focus on the maritime economy; incentivised MSMEs and adopted an enlightened approach to trade by finalising several FTAs including with UK and New Zealand and dismantling protectionist barriers including Quality Control Orders (QCOs). Indonesian exports to India are benefiting from these measures. As we read this piece, India is about to conclude the FTA with the EU, just as Indonesia concluded IEU-CEPA a few months before. One unfinished part of the agenda for both India and Indonesia is concluding the revision of the ASEAN-India Trade in Goods Agreement (AITIGA) and initiation of discussions on the bilateral trade agreement. In the haze created by tariff narratives, we sometimes lose sight of the ground reality that India is Indonesia’s fourth or sometimes third largest export destination and Indonesia is India’s eighth largest trading partner.
Following up on the outcomes of the Presidential visit several forward looking exchanges have taken place in eight primary areas including digital, health, financial integration, energy, food sufficiency, defence, education and culture have taken place. In the Digital and AI space, strong Indonesian participation in the AI Impact Summit is expected with Indonesia as Co-Chair for the Working Group on Economic Growth and Social Good at the Summit. Grounded in ethical & human-centric advancement driven by principles of inclusion, together India and Indonesia can play a pivotal role in shaping the Global AI discourse geared towards People, Planet, and Progress. During 2026 we also expect greater integration of our digital economies with the UPI-QRIS tie up in place, collaborations between capital markets as well as Central Banks of both countries agreeing to settlements in local currencies. The Indonesian e-commerce space will also brighten up this year with the entry of network centric open and inclusive digital commerce architecture.
Indian hospital giant, Apollo Hospitals has teamed up with Mayapada Hospitals to offer international standard healthcare here in Indonesia. When the hospitals are ready, Indonesia will conserve valuable foreign exchange spent by its nationals on obtaining treatment abroad. Several Indian pharmaceutical companies are also building factories here and 2026 year will see some of them commencing production. Training of health professionals has become an ongoing programme and latest AI based training methodologies are being adopted. India is also committed to make available in Indonesia a world class facility for liver transplants with high survival rate. Indian entrepreneurs are involved qucik roll out of the nutritious meals programme as well as supporting the Merah-Putih cooperatives. The learnings from Indian cooperative movement, particularly from the branding experience of Amul can be useful in the Indonesian context. There are initiatives in the pipeline to bring world class educational institutions to Indonesia. The dramatic reduction of solar power tariffs in India has generated curiosity in Indonesia and Indian entrepreneurs are now involved in its replication here in Indonesia. In defence the Indian endeavour has been to share the learnings from our defence industrialisation through which import dependence is being progressively reduced. A first mover in this area has been Indian Institute of Management, Bangalore, a leading QS ranked Business School, which proposes a tie up with Singhosari SEZ for commencing business management programmes. Archaeological Survey of India, which played a stellar role in the restoration of Angkor Wat in Cambodia is now all set to begin cooperation with the Ministry of Culture of Indonesia on the restoration of Prambanan Temple, as was decided in the New Delhi Summit.
With India and Indonesia marching ahead firmly on their economic transformation journey led by our common visions of Developed India 2047 & Indonesia Emas 2045, we as Comprehensive Strategic Partners are not only deepening existing bilateral ties, but also exploring new frontiers of cooperation in space, defence and critical minerals. As our two countries exhibit leadership of the Global South by registering strong economic performance, commitment to domestic economic reform and social inclusion, by further strengthening our bilateral ties, we can together brave the current geopolitical storms with greater resolve and fortitude.
