India Indonesia Relations: Trade, Agreements, Recent Developments - UPSC Notes

Over the years, India and Republic of Indonesia have built a multifaceted partnership driven by strategic alignment. As a major power in the Southeast Asia / Asia, Republic of Indonesia contributes actively to shaping global geopolitics and security dynamics. The establishment of diplomatic relations in Friendship Treaty 1951 (Diplomatic Relations Established 1949, Recognized Independence 1946) marked a pivotal step in India–Republic of Indonesia bilateral engagement. India and Republic of Indonesia sustain a Embassy, with each country’s embassy in the other’s capital facilitating strategic communication. The significance of India and Republic of Indonesia ties is of Key ASEAN partner, Indo-Pacific maritime security, Economic growth, highlighted by their defense cooperation, economic collaboration, cultural exchanges, and common objectives in global security. 

• The bilateral relationship between India and Republic of Indonesia spans Trade, defense, maritime, counter-terrorism, cultural, S&T, education like defense, nuclear energy, trade, space, oil and gas, cybersecurity, culture, and education. 
• Significant pacts covering areas like Friendship (1951), Defense (2001, 2018), Maritime (1977, 2018) have been established between India and Republic of Indonesia to strengthen collaboration. 
• Available data shows that India and Republic of Indonesia maintain a trade volume of USD 2940 billion (2023-24), underscoring their growing trade relationship. 
• India supplies Refined petroleum, vehicles, telecom equipment, agriculture, steel, plastics to Republic of Indonesia under their strong trade relations, boosting bilateral economic growth and cooperation. 
• Among its major imports from Republic of Indonesia, India includes Coal, crude palm oil, minerals, rubber, pulp, paper, reflecting robust trade relations. 

S&T MoU (2018, expired 2023), ITEC scholarships, ICCR chairs forms an important part of India–Republic of Indonesia relations, strengthening knowledge-sharing and capacity building. Covering themes such as Lines of Credit, Export to India, and Indian Companies operating in India Indonesia Relations, this article is a one-stop reference for GS Mains and PSIR Optional. 

India Indonesia Relations Establishment of Diplomatic Ties

The roots of India–Republic of Indonesia relations go back to Support for Indonesian independence, Bandung Conference (1955), NAM 1961. India–Republic of Indonesia relations were marked by key high-level engagements such as President Sukarno (1950), PM Nehru (1950s), PM Modi (2018). 

• Indonesian support to Pakistan (1965) reflect earlier disagreements between India and Republic of Indonesia, which were later addressed through diplomacy. 
• Early camaraderie, Cold War divergence, Post-Cold War/Act East revival highlight the evolution of bilateral cooperation between India and Republic of Indonesia.

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Strategic & Political Cooperation of India Indonesia Relations

The Key ASEAN partner, Indo-Pacific maritime security, Economic growth of the relationship between India and Republic of Indonesia is reflected in areas like defense collaboration, economic partnerships, cultural diplomacy, and shared security concerns on the global stage. 

• India and Republic of Indonesia deepen their MoU (2001, 2018), Joint exercises (Garuda Shakti, Samudra Shakti) by focusing on joint training, defense technology exchange, and security collaboration. 
• JWG on Counter Terrorism (2005) includes cooperation between India and Republic of Indonesia on terrorist tracking, rapid response, and secure communication. 
• Collaboration in Digital Public Infrastructure, Cybersecurity dialogue agreed promotes digital cooperation between India and Republic of Indonesia, enhancing mutual trust, cybersecurity, and technological progress. 
• G20, NAM, IORA, ASEAN, EAS, BRICS (Indonesia partner) enable India and Republic of Indonesia to cooperate on shared goals and tackle international challenges collectively. 
• Through their Energy Forum (2011), JWGs on Oil/Gas, Coal, Renewables, India and Republic of Indonesia are collaborating on energy efficiency, fossil fuel alternatives, and grid modernization. 
• In the field of MoU (2018), ISRO-BRIN agreements (2024), India and Republic of Indonesia continue to work together on shared research, innovative technologies, and space-based projects. 
• India and Republic of Indonesia have joined hands in sectors like Civil Aviation Consultation (2018), Increased direct flights to encourage seamless connectivity and tourism collaboration. 
• India and Republic of Indonesia have engaged in DTAA 2012 to streamline cross-border tax regulations and prevent double taxation.

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Trade and Economic Overview of India Indonesia Relations

• To further enhance their partnership, India and Republic of Indonesia have secured several agreements, including those in Friendship (1951), Defense (2001, 2018), Maritime (1977, 2018). 
• With a trade volume of USD 2940 billion (2023-24), India and Republic of Indonesia continue to strengthen their bilateral economic relations. 
• Investment flows account for Indian investment in Indonesia significant, Indonesian in India US$ 2939 billion in FY24, together with significant collaborative ventures between India and the foreign counterpart. 
• Regular meetings like Biennial Trade Ministers' Forum, Energy Forum, CEOs Forum, EFD Dialogue, usually taking place annually or every two years, aim to promote and assess the trade and investment relationship between India and its partner country. 
• India and Republic of Indonesia have introduced a series of India offers LoCs, Potential LoC for BrahMos discussed to foster long-term economic prosperity and financial collaboration. 
• The export component from Republic of Indonesia to India was valued at USD 2341 billion (approx from total trade FY2023-24). 
• Among India’s main exports to Republic of Indonesia are Refined petroleum, vehicles, telecom equipment, agriculture, steel, plastics, reflecting strong and balanced trade between the two countries. 

The recorded value of Indian exports to Republic of Indonesia is US$2341 billion (FY2023-24). India is represented in Republic of Indonesia by firms such as Around 100 Indian investments/JVs, GMR Airports, strengthening economic links.

Socio-Cultural & Diaspora Engagement

India and Republic of Indonesia thrive from the positive influence of their diaspora, which significantly impacts Strengthening economic ties, Cultural bridge, Business promotion. Through Jawaharlal Nehru Indian Cultural Centre, Swami Vivekananda Cultural Centre, CEP, students and artists from both countries get to share and learn new things. Educational ties between India and the other country are growing through ICCR scholarships, ITEC slots, MoU on Higher Education discussed. 

• The Around 14,000 NRIs, 12000PIO community (Sindhis, Sikhs, Tamils) in Republic of Indonesia plays a pivotal role in enhancing the cultural and economic relationship between India and Republic of Indonesia. 
• India and Republic of Indonesia capitalize on Joint military exercises, Cultural centers, Yoga, Bollywood to strengthen their geopolitical leverage and elevate their international influence.
• The partnership between India and Republic of Indonesia thrives on mutual support, with relatively small, estimated at around 100,000 contributing greatly to economic advancement.

India Indonesia Relations Recent Developments

President Prabowo Subianto to India (Jan 2025-reported/discussed) have played a vital role in deepening diplomatic engagement between India and Republic of Indonesia. India and Republic of Indonesia have engaged in ISRO-BRIN Space Cooperation (2024), Health, Maritime, Digital discussed, reflecting efforts to expand bilateral cooperation. 

• India’s collaboration with Republic of Indonesia includes Sabang port development aid, EMITS solar projects, contributing to long-term partnerships. 
• Efforts are ongoing to overcome Trade imbalance, Tapping full economic potential, Bureaucracy, which affect bilateral cooperation. 
• India and Republic of Indonesia are expected to enhance cooperation based on shared Enhanced maritime cooperation, Increased trade/investment, Deeper strategic alignment.

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UPSC Relevance of India Indonesia Relations

• Questions on India’s bilateral relations with Republic of Indonesia may feature in UPSC Prelims under International Relations or Current Affairs.
• Topics like defense ties, diaspora impact, or energy partnerships directly align with GS2 syllabus themes.
• The bilateral framework showcases how India’s foreign policy aligns with constitutional and ethical principles.
• International relations within Public Administration or Law optional papers can cite treaties, agreements, or global governance themes from this relationship.