Warming India–Indonesia rhetoric belies challenges of Global South leadership

New Delhi and Jakarta share many development challenges and foreign policy objectives. But despite last week’s summit, there remain several challenges to realizing the full potential of the bilateral relationship.

Expert comment Published 3 February 2025 4 minute READ

Dr Chietigj Bajpaee

Senior Research Fellow for South Asia, Asia-Pacific Programme

Ben Bland

Director, Asia-Pacific Programme

Indonesian President Prabowo Subianto’s visit to India last week highlighted the vast potential for collaboration between the two most populous democracies in the Global South. 

As neighbours with no major bilateral disputes, similar development challenges and overlapping worldviews (not to mention a shared cultural heritage from Bollywood to the Ramayana), New Delhi and Jakarta could put weight and energy behind calls for reform of international institutions. Together, they could provide real Global South leadership at a time when the multilateral system is breaking down.

However, the warm rhetoric from Prabowo’s meeting with Indian Prime Minister Narendra Modi belies the lack of substance in bilateral relations and the slow progress made in recent years. 

Modi and Indonesia’s previous President Joko Widodo, both elected in 2014, developed a nascent relationship but failed to transform that goodwill into a step-change in their nations’ ties. 

That is worrying. If two large, diverse democracies such as India and Indonesia cannot cooperate meaningfully as neighbouring states in the Indian Ocean Region and Indo-Pacific, what hope is there for cooperation across the broader Global South?

Helmed by strong leaders with deep wells of public support, both governments have an opportunity to push collaboration to new heights. But if they are to succeed, they will have to learn from the mistakes of the past and invest significant political and financial capital.

Turbulent history

There have been several false starts in the bilateral relationship. New Delhi was a vocal opponent of Dutch efforts to crush the Indonesian independence movement after World War Two, facilitating a cordial relationship between India’s first prime minister, Jawaharlal Nehru, and Indonesia’s founding President Sukarno. Both countries were strong proponents of ‘third world solidarity’, which manifested in the Asia-Africa Summit in Bandung in 1955 and the subsequent foundation of the Non-Aligned Movement. 

Both countries stepped up confidence-building through joint military exercises and humanitarian assistance operations, such as after the 2004 Indian Ocean tsunami.

However, the relationship became increasingly confrontational during the Cold War: Jakarta sided with Pakistan and China during India’s wars with both countries in the 1960s. Mutual mistrust persisted into the 1980s as Jakarta voiced concerns about India’s military presence on the Andaman and Nicobar Islands, located only 80 nautical miles from the Indonesian island of Sumatra. 

Relations improved over time as both countries stepped up confidence-building through joint military exercises and humanitarian assistance operations, such as after the 2004 Indian Ocean tsunami. Increasingly, practical and strategic considerations have trumped ideological affinities. 

Common development challenges

As sprawling, multi-ethnic democracies with heavily decentralized political systems, with borders set by the arbitrary limits of colonial expansion, India and Indonesia share many common development challenges. Both also have foreign policies that seek to forge independent paths between China and the US. Each speaks of the need to rebalance the multilateral system in favour of developing nations.

Too often, India and Indonesia have faced… challenges in parallel rather than in unison, operating essentially as competing foreign investment destinations.

There is much that both countries can learn from the other; from improving physical infrastructure to reducing burdensome bureaucracy and corruption, leveraging technological change and tackling climate change. And there are areas of existing collaboration: India is a leading buyer of Indonesian coal and both countries are seeking cooperation in areas from biofuels development to joint exploration of critical minerals.

But, too often, India and Indonesia have faced shared challenges in parallel rather than in unison, operating essentially as competing foreign investment destinations: Both see themselves as beneficiaries of the push to de-risk or diversify supply chains away from China. Both seek to leverage their large populations, favourable demographics and low-cost labour advantage. Both maintain thriving start-up digital ecosystems. 

Meanwhile, annual bilateral trade falls well short of the $50 billion target previously set for 2025. And free trade negotiations have been slow moving since 2011.

Focus

The joint statement between Modi and Prabowo called for both governments to collaborate across almost every imaginable issue from science and technology to maritime security and the Indo-Pacific regional architecture. 

Digital public infrastructure and health are obvious priorities for bilateral cooperation.

In fact, what both governments need is a focus on more limited ambitions where they can make concrete progress, deepen working-level relationships, and establish new mutually beneficial habits. 

Digital public infrastructure and health are obvious priorities for bilateral cooperation. India has enjoyed considerable success improving digital inclusion for its population through digitized identity, payment and data management systems. 

That experience could prove invaluable to Indonesia – as could India’s emerging role as the world’s pharmacy. India’s domestic reforms and international agreements mean that its pharmaceutical sector is expected to more than double its value to $130 billion in the next six years. 

There is space for companies from both sectors in each country to do more together, if their governments can mitigate their long-standing protectionist instincts. For instance, Indonesian and Indian companies have concluded pharmaceutical partnerships aimed at facilitating joint vaccine production. 

Agreements that were concluded during Prabowo’s visit offer a potential springboard. In the healthcare domain, this includes training of Indonesian medical professionals and mutual recognition of healthcare qualifications. In the tech space, both sides discussed the establishment of a cross-border digital payments system while India offered to share its experience in areas from digital identity systems to quantum computing.  

India and Indonesia should also expand their cooperation in global and regional forums, such as the UN, G20 and ASEAN, where countries can only hope to avoid being caught in a US–China bifurcation if they can scale up alternative forms of collective action. 

In theory, Indonesia’s recent admission to BRICS should help to facilitate greater cooperation. In reality, India is becoming increasingly aloof in the BRICS as the grouping becomes more overtly anti-Western. 

India has shown more appetite to engage Indonesia through forums where China is absent, such as the Indian Ocean Rim Association (IORA), though IORA has struggled to become more than a talking shop.

Both countries should also expand their cooperation through smaller initiatives. The establishment of a trilateral dialogue between Australia, India and Indonesia in 2017 is one such forum where the three countries can develop more targeted cooperation on areas such as maritime security, developing their blue (maritime) economies, and strengthening disaster resilience in the face of increasingly severe climate shocks. 

New Delhi views India as big and important enough to be its own pole in global affairs. In practice it lacks the resources and international presence to make significant impact unless it can find willing partners. Indonesia, for its part, has also stated ambitions to be a convening power for the Global South beyond Southeast Asia. 

Modi was right to speak of the potential in the two countries’ ‘age-old cultural and historical ties’. But New Delhi and Jakarta need to move beyond talk to real commitments if they are to develop a meaningful partnership and create a powerful voice for the Global South.