Indonesian Navy personnel are seen on the submarine KRI Nanggala-402 as they arrive in Surabaya, East Java province, Indonesia, February 6, 2012. Picture taken February 6, 2012. M Risyal Hidayat/Antara Foto/via REUTERS
By Sudhi Ranjan Sen and Prima Wirayani
Jan 25, 2025 (Bloomberg) —Indonesia and India will step up their economic and defense cooperation as the South Asian nation seeks to position itself as a counterbalance to China in the region.
The two nations decided to work jointly in the area of defense manufacturing and diversify their trade basket during Indonesian President Prabowo Subianto’s visit to New Delhi.
Ties with Indonesia were crucial to promote a “rule-based order,” in the region, Indian Prime Minister Narendra Modi said, without mentioning China. “Indonesia is our key partner in the Indo-Pacific,” he said. Both are “committed” to promote “freedom of navigation.”
The two countries also agreed to deepen and increase maritime cooperation. A team of senior Indonesian defense officials will be in India soon for the same.
“I have given direction to my team to accelerate, to cut bureaucracy, too much over regulation, to put at the foremost the common bilateral interest,” Subianto said.
The comments assume significance as President Donald Trump’s commitment to work with regional allies to counter China’s aggressiveness in the region remains untested in his second term.
Over half of India’s trade “passes through the South China Sea and Malacca Straits,” according to Bloomberg’s analyst Chetna Kumar. “India intends to preserve its freedom of navigation and counter China’s territorial ambitions in the region.”
Prabowo, who will preside as chief guest at India’s Republic Day function on Sunday, asked Indian companies to invest in infrastructure development in Indonesia.
© 2025 Bloomberg L.P.
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