Overview of India-Indonesia relations

With deep-rooted ties that go back thousands of years, India and Indonesia have always been natural partners in culture, economy and politics. However, with the changing dynamics in Asia and the world, the two countries are looking to develop their exchanges and cooperation further and bring their relations to a new level.

Religious and cultural traditions from India have has a profound influence on Indonesia: Hinduism, Buddhism and Islam all came to Indonesia from India. But the relationship between India and Indonesia goes deeper into cultural, economic and political ties: they are both democratic, pluralistic and youthful countries.

Within the new context of regional development, both countries are now looking forward to build upon their old heritage and renew their ties through practical means and warm discussions. They also want to build upon connectivity and social media to forge friendship in a modern context.

On the occasion of the visit of the Indian Vice President Mohamed Hamid Ansari in Indonesia in November 2015, Rajya Sabha TV held a special report to review the political, economic and cultural relations between India and Indonesia.

Economic ties between India and Indonesia

Trade, commerce and business are at the foundation of the relationship between the two countries. India and Indonesia have been historically close because of their geographic proximity: the Andaman and Nicobar island of India are only 70 nautical miles from Sumatra island and Indonesia.

The Andaman and Nicobar islands of India close to Indonesia

Therefore, maritime links from India to Southeast Asia are all passing through Indonesia. That’s why both countries are now revising their positions on regional issues, defense and security, climate change, renewable energy and maritime cooperation.

Interested in extending their economic ties, India and Indonesia are now particularly looking into the exchange of commodities, investment opportunities and tax benefits.

Key facts on India-Indonesia trade

  • Indonesia is India’s second largest trading partner in ASEAN
  • Bilateral trade between India and Indonesia stands at 20 billion USD in 2015
  • India is the largest buyer of crude palm oil from Indonesia

Main Indian imports from Indonesia 

  • coal
  • minerals
  • rubber
  • pulp and paper

Main Indian exports to Indonesia 

  • petroleum products
  • maize (corn)
  • commercial vehicles
  • pharmaceuticals

Investments between India and Indonesia

Indian companies have about 15 billion USD worth of investment in Indonesia, primarily in infrastructure, power, textile, steel and consumer goods.

For both sides there seems to be much room for expansion in specialties exchanges. IT, pharmaceuticals, infrastructure in railways are economic drivers of India but missing in Indonesia. For its part, Indonesia is strong in plantations, low-cost housing and retail, which India needs to develop besides imports of coal and palm oil.

Cultural bonds between India and Indonesia

Indians in Indonesia

About 120,000 people with Indian origins currently live in Indonesia, and about 10% of them are non-resident Indians expatriates. An exact number is difficult to determine though, as many Indians have merged with the locals throughout the years. They are concentrated in Medan, Jakarta and Sumatra.

Education exchanges between India and Indonesia

The Udayana University of Bali has a strong department of Indian cultural and religious study. Upon this base, Indian authorities want to expand further their ties in education, research, exchange of staff and faculties, as educating the youth is the key to India and Indonesia’s future.

For more information on India-Indonesia relations, check the the summary and history of their ties on the website of the Indian embassy in Jakarta. More information, especially on cultural and religious influence, can also be found on Wikipedia.

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