It Is Time for Indonesia and India to Deepen a Mutually Beneficial Partnership

By Primus Dorimulu

Relations between Indonesia and India span thousands of years. Today, the challenge is no longer simply to inherit that distinguished past, but to build a shared future—one in which both nations become influential global players. Indian Prime Minister Narendra Modi's visit to Indonesia on July 7, 2026, could mark a turning point, ushering in a new era of strategic partnership built on mutual benefit.

Prime Minister Modi's visit as the official guest of President Prabowo Subianto is more than a routine state visit. It reciprocates President Prabowo's attendance as guest of honor at India's Republic Day celebrations on January 26, 2025. More importantly, the meeting between the two leaders presents an opportunity to elevate Indonesia–India relations into a new chapter—from one rooted in shared history to a strategic partnership for the 21st century.

The relationship between Indonesia and India is, at its core, a civilizational one. Long before the emergence of modern nation-states, the Indonesian archipelago and the Indian subcontinent were linked by trade routes across the Indian Ocean. Those routes facilitated the exchange not only of goods but also of religions, languages, scientific knowledge, art, architecture, and philosophy. Hinduism and Buddhism, carried from India, took deep root across the archipelago, giving rise to enduring cultural landmarks such as Borobudur and Prambanan temples, the wayang shadow puppet tradition, the epics Ramayana and Mahabharata, and many cultural values that remain integral to Indonesia's national identity. This is more than a relationship between two countries; it is a bond between two of Asia's great civilizations.

History, however, should not merely be remembered. It should serve as the foundation for building the future. Both countries possess enormous strengths that could make them major global powers. The key lies in fostering mutual understanding and pursuing cooperation that delivers tangible benefits for both sides.

If the past was defined by the exchange of spices, religion, and culture, the future will be shaped by technology, artificial intelligence, the digital economy, cybersecurity, semiconductor manufacturing, defense, clean energy, and data sovereignty. This shift marks a profound transformation in Indonesia–India relations—from a partnership rooted in shared civilizational heritage to one driven by innovation.

That transformation has become even more relevant as the world undergoes its most significant geopolitical realignment since the end of the Cold War. Strategic rivalry between the United States and China has reshaped global trade, investment, supply chains, and the race for advanced technologies. Middle powers such as Indonesia and India must therefore exercise strategic foresight—the ability to anticipate long-term developments—so they do not become merely markets or arenas for great-power competition, but emerge as influential actors helping shape the new global economic order. It is in this context that the strategic value of Indonesia–India relations has grown substantially.

India is now among the world's fastest-growing major economies. Projections by the International Monetary Fund and the World Bank suggest that it is on track to become the world's third-largest economy within the next decade. Home to 1.4 billion people—the largest population on earth—India also benefits from a strong demographic dividend, a mature information technology industry, and a successful Digital Public Infrastructure encompassing digital identity, digital payments, and digital commerce. Together, these achievements have established India as one of the world's leading centers of innovation.

Indonesia, meanwhile, is Southeast Asia's largest economy. It possesses abundant strategic natural resources, a population of more than 285 million, and a geographic position connecting the Indian and Pacific Oceans. It also has enormous potential in critical mineral downstream processing, the energy transition, and the digital economy. Forecasts by the OECD, PwC, and Goldman Sachs suggest that Indonesia could become one of the world's largest economies by the middle of this century if it succeeds in raising productivity, improving human capital, and strengthening its technological capabilities.

Taken together, Indonesia and India are highly complementary economies. Yet their economic relationship has yet to reflect that potential. Indonesia currently enjoys a sizable trade surplus with India, driven largely by exports of coal, palm oil, rubber, minerals, and other resource-based commodities. India, by contrast, exports pharmaceuticals, machinery, vehicles, information technology services, digital services, and a wide range of higher value-added manufactured goods.

A trade surplus is undoubtedly positive for Indonesia. But from the perspective of development economics, a surplus built primarily on exports of raw commodities is insufficient to propel the country toward developed-economy status. This view echoes the work of development economists Ha-Joon Chang of South Korea and Alice H. Amsden of the United States.

Both scholars have shown that virtually every country that successfully caught up with advanced economies—from Japan and South Korea to Taiwan—did not rely solely on free trade. Instead, they built competitive national industries through strategic industrial policies, investment in technology, human capital development, and the transfer of knowledge. Their central argument is that lasting prosperity comes not from exporting raw materials, but from producing higher value-added goods and mastering advanced technologies.

For that reason, Indonesia–India economic relations should enter a new phase. The priority should no longer be simply expanding trade volumes, but fostering two-way investment, technology transfer, joint research, manufacturing development, the digital economy, artificial intelligence, semiconductors, pharmaceuticals, and broader innovation ecosystems. Such cooperation would do more than generate trade surpluses—it would accelerate Indonesia's transformation into a more advanced industrial economy capable of competing globally.

The imbalance is also evident in investment. Data show that Indian investment in Indonesia far exceeds Indonesian investment in India. In 2025, Indian investment in Indonesia reached approximately US$237.6 million, while Indonesia invested only about US$9.8 million in India. This disparity underscores the considerable room for developing a more balanced investment partnership.

BRICS

This opportunity has become even more significant because Indonesia and India now belong to the same strategic forum: BRICS. Indonesia officially became the bloc's 11th full member on Jan. 6, 2025. Together with India, Indonesia is also a member of the World Trade Organization (WTO) and the Group of Twenty (G20). Indonesia differs from India in also belonging to the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC), while India exerts considerably greater influence within BRICS and across many Global South institutions.

Their shared membership in BRICS should not be viewed merely as a political symbol. The bloc is intended to strengthen South-South cooperation by promoting development, trade, investment, innovation, and reforms to make global economic governance more inclusive. Indonesia did not join BRICS to distance itself from the United States or Europe, but to broaden its diplomatic and economic options. Its foreign policy remains firmly anchored in the principle of being "free and active": maintaining friendly relations with all countries while aligning with none.

Within BRICS itself, the distribution of national power reveals an interesting dynamic. Judged by overall national capabilities, the three most influential members are China, India, and Russia. China leads in economic scale, technology, industrial capacity, and manufacturing. India stands out for its rapid economic growth, demographic dividend, digital innovation, and long-term potential. Russia remains a major power in military capability, energy resources, and strategic security. Diplomatically, China, India, Russia, and Brazil play the most prominent roles, while Saudi Arabia, Russia, Iran, and the United Arab Emirates are among the bloc's leading energy powers.

Indonesia may not yet rank among the world's leading economic, technological, or diplomatic powers. Yet it possesses strengths that few countries can match: an exceptionally strategic geopolitical location, a relatively stable democracy, Southeast Asia's largest economy, vast reserves of critical minerals, and the ability to serve as a middle power capable of bridging competing international interests.

A Strategic Partnership

Why should Indonesia and India deepen their strategic partnership? The answer can be understood through the ideas of two of the most influential scholars of international relations: Hans J. Morgenthau and Joseph S. Nye Jr.

Morgenthau, the pioneer of realist theory, argued that every state ultimately pursues its national interests. But national power is determined by far more than military strength. It also depends on economic performance, natural resources, technological capability, the quality of governance, national morale, and diplomatic skill.

Nye, meanwhile, introduced the concepts of soft power and smart power—the ability of countries to influence others not through military or economic coercion alone, but through attraction, innovation, culture, technology, reputation, and trust.

In an increasingly interconnected world, national strength can no longer be measured solely by gross domestic product or military arsenals. It also depends on a country's ability to build productive, mutually beneficial partnerships. Nations that collaborate effectively will ultimately wield greater influence than those that choose to act alone.

This is where an Indonesia–India partnership becomes especially compelling. Indonesia's comparative advantages lie in its strategic natural resources, geopolitical location, and position as Southeast Asia's largest economy. India excels in information technology, the digital economy, pharmaceuticals, innovation, and the benefits of a young and growing population. These strengths are not meant to compete with one another, but to complement each other. Cooperation in investment, technology transfer, artificial intelligence, digital industries, defense, education, and the maritime economy would generate far greater value than either country could achieve independently.

Ultimately, Indonesia–India relations should not remain defined by historical nostalgia or rising trade figures alone. A genuine strategic partnership is one that enhances the competitiveness of both nations, expands their diplomatic influence across the Indo-Pacific, and delivers tangible improvements in the welfare of their people.

India is not merely a vast market; it is also a partner capable of accelerating Indonesia's digital transformation. Indonesia, in turn, can serve as India's gateway to ASEAN, a global hub for downstream processing of strategic minerals, and an indispensable partner in energy security, food security, the maritime economy, and Indo-Pacific supply chains.

This vision of a mutually beneficial partnership should define the next chapter of Indonesia–India relations. Both countries must look beyond the pride of their shared history and the steady rise in bilateral trade. The greater challenge—and opportunity—is to create value together, innovate together, and build a new center of Asian growth capable of contributing meaningfully to global stability and prosperity.

The strength of a nation is determined not only by what it possesses today, but also by whom it chooses to stand beside in shaping the future. Indonesia and India have shared a history spanning thousands of years. They now have the opportunity to share a future.

If the 20th century was the century of Indonesia–India diplomatic relations, then the 21st century should become the century of Indonesia–India strategic partnership—a partnership built not on historical nostalgia alone, but on a shared vision of becoming two democratic, economic, technological, and diplomatic powers that help shape the future of Asia and the world.

The author is Chief Executive Officer of Investortrust.id.