Indonesia, India agree to step up cooperation in defence and other key areas

Indian Prime Minister Narendra Modi and Indonesian President Joko Widodo check rifles produced by PT Pindad during a visit to the National Monument in Jakarta on May 30, 2018.
Indian Prime Minister Narendra Modi and Indonesian President Joko Widodo check rifles produced by PT Pindad during a visit to the National Monument in Jakarta on May 30, 2018.PHOTO: EPA-EFE

JAKARTA - Indonesia and India agreed to step up cooperation in a broad range of areas, particularly in defence and trade, following a meeting between President Joko Widodo and Prime Minister Narendra Modi on Wednesday (May 30).

Mr Joko said that, in defence, both leaders reached agreement to advance maritime cooperation, particularly in the context of the Indo-Pacific strategy.

They also agreed to develop infrastructure and enhance connectivity, especially in Sabang Island, Indonesia's westernmost territory, and India's Andaman Islands, as well as carry out joint manufacturing of products in the defence industry, including a water cannon that both countries were developing.

The Indo-Pacific strategy refers to an emerging alliance between India, the United States, Australia and Japan which some have interpreted as as a means to contain China.

Maritime cooperation between Indonesia and India have so far been through naval exercises and patrolling between the Andaman Sea and Malacca Strait.

"We agree to step up our strategic partnership to comprehensive strategic partnership and, with that, bilateral relations between Indonesia and India will become stronger and better," said Mr Joko in a joint statement with Mr Modi at the Merdeka Palace in Jakarta.

"This steady relationship will not only benefit citizens of both countries, but also the stability and welfare in the region."

Turning to trade issues, Mr Joko said that Indonesia had requested India to address the issue of high import duty on palm oil.

Indonesia is the world's top palm oil producer and India is now its largest buyer of the commodity which is used widely in a number of products from cooking oil, soaps to biofuel.

Indonesia is also expecting more Indian investments for its infrastructure building programme, including in seaports and airports, and the pharmaceutical industry, said Mr Joko. .

Both leaders on Wednesday witnessed the signing of nine agreements in the area of defence, infrastructure, pharmaceutical, health and science and technology.


Indonesia’s Foreign Minister Retno Marsudi said that Indonesia and India have renewed an agreement on defence which expired a few years ago.

The future cooperation would include regular dialogue and consultations, education and training, joint exercises, collaboration in science and technology, and humanitarian aid.

Both countries will start this year the commercial production of 300 water cannons by Indonesia’s state-owned weapon manufacturer PT Pindad and India’s automotive company Tata Motors.

“We develop this product not only for the domestic market, but also for the regional market,” she said.

The collaboration of other defence products will follow in the future, she added.

Mr Modi, who is on his first-ever official visit to Indonesia, underlined that both countries, as strategic partners, had similar interests to ensure maritime security and maintain their strategic position in the Indo-Pacific region as well as guarantee economic development in the area.

"We are facing similar changes in the Indo-Pacific. We must keep working together to guarantee our common welfare," he said.

Mr Modi also said that India's vision on security and welfare in the region and its Act East Policy were similar to Mr Joko's maritime fulcrum policy.

India's maritime policy called sagarmala, or "ocean garland", centres on improving access to ports, while Indonesia's maritime fulcrum policy is based on five pillars, including the economy, security and development, and also asserts the importance of sea-connectivity across the sprawling archipelago of more than 17,000 islands.

Mr Modi's also underlined both countries' commitment to achieve the target to boost bilateral trade to US$50 billion (S$67.1b) by 2025.

India is Indonesia's biggest trading partner in South Asia and fourth biggest trading partner in the world. Two-way trade reached US$18.13 billion (S$24.27 billion) last year, up nearly 40 per cent from a year earlier. Indonesia enjoyed a surplus of US$10.04 billion in bilateral trade, according to data from the Trade Ministry in Jakarta.

In terms of investment, Asia’s third largest economy is the 16th largest investor in Indonesia, pouring US$286.6 million in the past year. That figure has jumped by more than five-fold from 2016,  statistics from Indonesia’s Investment Coordinating Board shows. 

During an Indonesia-India CEO Forum on Tuesday (May 29), the Indonesian Chamber of Commerce and Industry (Kadin) and its Indian counterpart, the Confederation of Indian Industry (CII), inked a deal to intensify business cooperation in four areas: manufacturing, mining, pharmaceutical and infrastructure. 

“In terms of mining, for instance, India is the main destination of Indonesia’s coal export and with the constant rise of India’s demand, Indonesia can still increase the portion of its coal shipment. India is also willing to invest in this (coal mining) sector,” Kadin chairman Rosan Roeslani said in a statement on Wednesday.

Business people from the two groups  met  Mr Joko and Mr Modi  on Wednesday to report on the results of their engagement during the CEO Forum.

Under the scorching sun at noon on Wednesday, the two leaders also shared a light moment  at the National Monument here.  They flew kites to mark 70 years of diplomatic ties next year, in a symbolic gesture of hope  for those ties to scale new heights. The event was attended by, among others, Indonesia’s Foreign Minister Retno, Jakarta Governor Anies Baswedan and Indian Ambassador to Indonesia Pradeep Kumar Rawat.

The kites were made by the Indonesian Kite Museum, the organiser of the India-Indonesia Kite Festival along with Ahmedabad Kite Museum. Kites made by both Indonesian and Indian craftsmen were showcased, including ones that featured tales from the Indian Ramayana that are also popular in Indonesia.

Mr Modi  is on a three-day visit to Singapore, beginning on Thursday (May 31).

Correction note: An earlier version of the story stated that the bilateral trade increase was 22.34 per cent. It should be nearly 40 per cent. We are sorry for the error.