Indian Council of World Affairs

Abstract: India’s Prime Minister Narendra Modi undertook a State Visit to Indonesia from 6-8 July 2026, building on the State Visit of President Prabowo Subianto to India in January. Key outcomes of the PM Modi’s visit included agreements on Brahmos, and Astra missile, along with rare earths. This article examines the significance of the visit for bilateral ties, and explore the challenges, and opportunities for the partnership going forward. 

Introduction

PM Modi’s three-day visit to Indonesia, his first standalone state visit since the elevation of bilateral ties to a Comprehensive Strategic Partnership in 2018, imparted considerable momentum to the relationship by advancing cooperation across multiple sectors. The two largest Asian democracies signed 16 agreements spanning[i] defence, critical minerals, maritime connectivity, trade, the digital economy, education, agriculture, and healthcare, among others. Key breakthroughs during the visit included Indonesia’s decision to procure BrahMos supersonic cruise missiles and Astra missiles from India, alongside an agreement on critical minerals cooperation. The visit saw defence, critical minerals, and maritime security emerging as the most substantive areas of bilateral cooperation.

Jakarta’s pivot towards New Delhi aligns with President Prabowo's broader foreign policy orientation and his articulated “Good Neighbor Policy”,[ii] which is grounded on diversification and independence. Notably, this diversification is being pursued with greater intensity[iii] under the Prabowo administration than was the case under his predecessor, Joko Widodo, with the incumbent president adopting a distinctly hands-on approach to statecraft while actively seeking to grow Indonesia’s geopolitical profile. With Indonesia being the ASEAN’s largest economy, its orientation augurs well for India's Act East Policy (AEP), that has long attracted scholarly criticism[iv] for generating grand declarations while yielding few substantive deliverables. The article argues that the visit will contribute in partly realizing the unrealized potential inherent in the bilateral ties.

Significance of the Visit

Among the principal outcomes of the recent state visit, the defence sector emerged as the most consequential dimension, providing the bilateral relationship with much-needed momentum. India’s joint statement confirmed that both countries agreed on the BrahMos Missile System and an Air-to-Air Missile Cooperation Agreement, likely pertaining to the Astra Beyond-Visual-Range Air-to-Air Missile (BVRAAM). While national and international media have reported[v] the signing of contracts for the supply of Brahmos and Astra missiles, neither government has officially confirmed contract signing. India's Ambassador to Indonesia, Sandeep Chakravorty, has nonetheless stated[vi] that the contracts “have been signed or are in the process of being signed,” with work orders still pending.

Although the value of the BrahMos contract and the quantity of missiles to be supplied remain undisclosed, the deal positions Indonesia as India's third export customer for the system, following the Philippines and Vietnam, and reflects the expanding regional and international footprint of India’s defence industry.

Strategic Rationale for the BrahMos Acquisition

The BrahMos deal syncs with President Prabowo’s assertive defence agenda, which prioritises military modernisation. According to Brigadier General Rico Ricardo Sirait, Head of the Defence Information Bureau at Indonesia's Ministry of Defence (Kemhan), the acquisition forms[vii] part of Indonesia’s broader effort to modernise its principal weapon systems, with particular emphasis on strengthening coastal defence. The primary impetus for Brahmos acquisition stems from the Indonesian Navy’s identification of a capability gap in fast-strike coastal defence. With a supersonic speed of Mach 3 and a range of 290 kilometres,[viii] the missile can be deployed from both naval vessels and shore-based platforms, thereby extending coverage over maritime chokepoints and enhancing deterrence.

Jakarta’s emphasis on anti-access/area-denial (A2/AD) capabilities is particularly salient given Indonesia’s geographic position astride[ix] the Archipelagic Sea Lanes and several critical maritime chokepoints, including the Malacca, Makassar, Sunda, Bali, and Lombok Straits. This strategic objective also underpinned Jakarta's earlier procurement of two Scorpène-class submarines from France’s Naval Group,[x] in a deal valued at over USD 2 billion. The pursuit of such A2/AD capabilities—consistent with the broader trend among smaller navies of prioritising sea-denial assets, has gained further salience for Indonesia in light of a key lesson drawn from the Iran conflict i.e., geography favours the defender. Indonesia's extensive coastline, its more than 17,000 islands, and its numerous strategic chokepoints, through which naval forces must transit to secure critical shipping lanes, render such weapon systems especially relevant to leveraging the country's geographical advantages in contingency or conflict scenarios.

Furthermore, although Indonesia is not a claimant state in the South China Sea dispute, China's nine-dash line overlaps with Indonesia's Exclusive Economic Zone (EEZ). Chinese Coast Guard vessels and fishing boats have on multiple occasions[xi] entered Indonesia's EEZ, obstructing hydrographic survey and offshore oil exploration activities while engaging in unauthorised fishing within Indonesian territorial waters. Consequently, the BrahMos acquisition can also be percieved as an effort to bolster Indonesia's deterrence capabilities, particularly in the waters surrounding the Natuna Islands, where Chinese encroachments have not been uncommon.

The Astra Missile Deal

While the BrahMos acquisition is driven primarily by Indonesia’s maritime security and deterrence requirements, the rationale for procuring Astra missiles—intended to arm the Indonesian Air Force’s Su-30 fleet, lies in addressing critical air power capability gaps. From Jakarta’s perspective, India was a natural partner for this acquisition given its extensive experience[xii] operating and integrating Astra missiles on Russian-origin fighter aircraft such as the Sukhoi Su-30MKI and MiG-29. For Indonesia, the Astra missile addresses a critical capability gap, as its Air Force currently lacks beyond-visual-range (BVR) missiles for its fighter fleet, notwithstanding its recent decision to procure MBDA’s Meteor BVR missile[xiii] for its newly acquired Rafale aircraft. The procurement of Astra would thus enable the Indonesian Air Force to operate within heavily contested airspace without compromising aircraft survivability.

Of the two missile systems under agreement, the export order for Astra carries particular significance, since unlike BrahMos, it is an entirely indigenous syste— reflecting the growing competitiveness of India's defence industry within a niche technological domain. The contract is further expected[xiv] to encompass supporting infrastructure, operator training, and maintenance services. This is reinforced by the emphasis placed, both during the India–Indonesia Defence Ministers' Dialogue 2025 and in the recent joint statement, on strengthening defence supply-chain linkages through technical assistance, capacity building, and the establishment of military maintenance facilities.[xv] Such intentions signal India’s willingness to share operational experience and technical expertise, lending the agreement significance beyond that of a off-the-shelf procurement. Notably, the maintenance, repair, and overhaul (MRO)-related engagement also portends of a long-term defence partnership.

More broadly, the integration of Astra missiles onto Indonesia's Russian-origin Su-30 fighters demonstrates the compatibility of Indian weapon systems with major foreign-origin platforms, potentially broadening India's defence export markets among the numerous countries that continue to operate Russian-origin fighters. Strategically, these defence agreements reflect a complementarity between Indonesia's defence requirements and India's newfound willingness to share advanced defence technologies with ASEAN states, as affirmed[xvi] by India’s Defence Secretary Rajesh Kumar Singh during the Shangri-La Dialogue in May 2026.

Maritime Cooperation

Maritime cooperation constitutes a further avenue through which bilateral ties may be advanced, wherein cooperation has lagged. Despite being maritime neighbours, India–Indonesia maritime security cooperation has largely been confined to periodic joint exercises and coordinated patrols. This can be partly attributed to India’s prioritisation of other regional partners like Philippines, Australia, and Japan.

The visit yielded three outcomes[xvii] in this domain: the renewal of the Memorandum of Understanding (MoU) on Maritime Safety and Security Cooperation; the decision to position an International Liaison Officer (ILO) from Indonesia at the Information Fusion Centre–Indian Ocean Region (IFC-IOR), Gurugram; and India's expressed interest in partnering on the integrated development of Sabang Port.

While the MoU renewal represents a standard and routine practice, the posting of an Indonesian ILO at the IFC-IOR is particularly noteworthy, making Indonesia only the third ASEAN country to station a liaison officer at the fusion centre. This development is expected to enhance real-time maritime information sharing and signals growing mutual trust between the two countries. It will also contribute to collective maritime domain awareness (MDA) efforts and facilitate cooperation in addressing shared maritime challenges, including IUU fishing, piracy, and smuggling, besides supporting the policing of Indonesia's vast 54,716-kilometre coastline[xviii]—the third longest globally.

With respect to Sabang Port, the precise nature of India's involvement remains unconfirmed. Ambassador Chakravorty has recently confirmed that decisions regarding the project’s scope, modalities, and financing, including whether it will proceed as a government-to-government or private sector-led initiative, will rest ‘primarily’[xix] on discussions with the Indonesian side.

Nonetheless, the Sabang project carries substantial strategic value for New Delhi. Situated in Indonesia's Aceh Province at the northern tip of Sumatra, overlooking the entrance to the Malacca Strait, the port lies along a critical sea line of communication (SLOC) through which more than 55%[xx] of India's trade by volume transits. It is also located in proximity to India's International Container Transshipment Port (ICTP)[xxi] under development at Great Nicobar Island, with both facilities positioned near the northern entrance to the Strait of Malacca. Economically, the development of Sabang and India's potential access to the port could strengthen connectivity between the Andaman Islands and Aceh Province, thereby boosting bilateral trade. Strategically, it would enhance India's capacity to monitor traffic along one of the world's busiest sea lanes, sustain its presence in the eastern Indian Ocean Region, expedite humanitarian assistance and disaster relief (HADR) operations, and further deepen maritime cooperation—complementing AEP.

Rare Earths Cooperation

Beyond defence and maritime security, the visit also underscored cooperation on rare earth elements (REEs), an outcome arguably as significant as the defence agreements concluded between the two countries. The India-based private firm Midwest Ltd has partnered with Indonesia's state-owned PT Perusahaan Mineral Nasional (PERMINAS) and the Non-Ferrous Materials Technology Development Center (NFTDC),[xxii] marking the first instance of an Indian private enterprise securing overseas rare earth assets for the manufacture of rare earth magnets. Under the agreement, Midwest Energy and NFTDC are to provide technology and operational expertise for establishing a rare earth magnet manufacturing plant, while PERMINAS will contribute through the extraction of mineral resources. This proposed facility carries considerable importance for the mineral security and industrial requirements of both countries, not only in light of China’s continued and evolving REE exports restrictions, but also because Indonesia currently lacks commercial rare earth refining capacity, without which dependence on Chinese processors would persist.

This cooperative arrangement reflects a notable complementarity between the resource endowments and requirements of the two countries. Indonesia possesses substantial reserves of heavy rare earth elements (HREEs),[xxiii] which are critical for defence systems and high-value industrial products, whereas India's domestic reserves of HREEs remain scarce.[xxiv] The partnership is also likely to involve an offtake arrangement benefiting India, and aligns with President Prabowo's broader industrial policy of leveraging Indonesia's critical mineral resources toward technology acquisition rather than the mere export of raw materials.

From Jakarta's perspective, the partnership is likewise driven by the objective of unlocking value from its abundant mineral and rare earth resources while advancing its high-technology manufacturing ambitions. Indonesia seeks to transition from a resource-based economy toward a global high-technology manufacturing hub[xxv] by developing end-to-end domestic supply chains in sectors such as electric vehicles (EVs), semiconductors, and advanced electronics—all of which rely on REEs as essential manufacturing inputs.

These objectives are reinforced by significant policy drivers. President Prabowo’s administration has prioritised the development of mineral supply chains through initiatives such as the establishment of BPI Danantara. The independent entity is mandated to manage and optimise government investments and state assets[xxvi] in support of the Asta Cita development vision while accelerating industrialisation and attracting global capital, including in the mining sector. The establishment of PERMINAS[xxvii] under Danantara in late 2025—Indonesia’s first mining company dedicated exclusively to rare earths and select other critical minerals, also reflects Jakarta’s sectoral policy emphasis, while providing domestic foundation for collaboration with India.

Steering the Partnership Forward

Indonesia’s status as the world's largest exporter of tin, together with its reserves of monazite—a phosphate mineral bearing REEs establishes it as a critical sectoral partner for India going forward. This collaboration, however, would likely contend with environmental challenges. REE extraction from monazite generates thorium and uranium by-products, both radioactive, necessitating licensed handling and waste disposal infrastructure that Indonesia lacks. Compounding this, PERMINAS possesses no operational track record which could introduce delays and raise questions regarding recovery feasibility, notwithstanding its current engagement in pilot exploration projects.

Within the defence sector, further complementarity exists i.e., Jakarta’s plans to procure up to 200 new helicopters, including multirole light helicopters, and Indian Hindustan Aeronautics Limited (HAL)-developed Advanced Light Helicopter (ALH) Mk-3,[xxviii] Dhruv, a multi-role, all-terrain platform. The operational reliability of all three ALH Dhruv variants (Mk-1, Mk-2, Mk-3) is evidenced by their use by the air forces of Mauritius, the Maldives, Colombia, and Nepal. The Dhruv is also considered to offer performance comparable to similarly classed Western platforms, such as the American Bell 412,[xxix] at approximately 60 percent of the cost, with much lower maintenance costs relative to manufacturers such as Augusta and Airbus.

While cost considerations render the ALH Dhruv a potentially attractive option for Indonesia, the path forward for bilateral defence partnership would have to navigate certain challenges including those associated with maintenance support. Notwithstanding its progress in defence indigenisation, India remains imports dependent in multiple kinds of spare parts including avionics components, aero and marine engine parts, radar modules, sonar arrays, and thermal imaging components. Hence the continued deepening of this defence partnership presents a valuable opportunity to strengthen indigenous industrial capacity in spares and components. 

Maritime cooperation represents another promising avenue. A dedicated maritime dialogue mechanism could be established, given the expansive scope of bilateral maritime cooperation and the fact that the existing security dialogue covers a broad range of issues beyond maritime security—diluting the sustained attention such cooperation requires.

Hydrographic cooperation offers a further avenue for strengthening bilateral maritime ties. At present, only the waters surrounding Sumatra have been surveyed and corresponding nautical charts produced within Indonesia’s vast maritime territory. The waters to the east and south of Sumatra—encompassing island ports, harbours, navigational channels and routes, coastal areas, and deep-sea waters, could be jointly surveyed by the Indian Naval Hydrographic Department and Indonesia's Hydrography and Oceanography Centre. Such joint surveys and the production of nautical charts would facilitate both knowledge transfer and the direct provision of hydrographic products to Indonesia, thereby enhancing the commercial and military navigation safety, while strengthening India's regional influence through tangible contributions to a strategic partner with limited domestic hydrographic capacity. Such regional maritime collaboration would also align with India’s Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR) initiative.

Finally, both sides would be well served by expediting negotiations toward concluding the long-pending White Shipping Information Exchange Agreement, particularly given that Indonesia remains India's second-largest ASEAN trading partner.

Conclusion

Going forward, one of India’s priority will likely be on utilising existing bilateral economic dialogue mechanisms for finding mutually acceptable ways of reducing trade imbalance of USD 15.80 billion of the total bilateral trade of USD 24.78 billion.[xxx]

This high level engagement has attempted to impart greater substance to a partnership that has long remained below its potential. BrahMos and Astra deals signal genuine strategic convergence, and rare earths cooperation appears a timely, pragmatic, and complementarity driven partnership. Yet translating this momentum into durable outcomes will ultimately depend on sustained implementation, institutional development, continuity, and resilience,  and the ability of both sides to navigate capability, commercial, and regulatory constraints. If successfully realised, the partnership could evolve into a consequential pillar of India’s AEP and Indonesia’s broader strategy of diversification in the Indo-Pacific.

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*Araudra Singh is a Research Associate at the Indian Council of World Affairs (ICWA)
Disclaimer: The views expressed are personal.

Endnotes

[i] Press Information Bureau, “India-Indonesia Joint Statement during the State Visit of Prime Minister to Indonesia, July 08, 2026,” https://www.pib.gov.in/PressReleasePage.aspx?PRID=2282084®=3&lang=1, Accessed on July 28, 2026.

[ii] Indonesia Business Post (2024). “Reshaping Diplomacy: Prabowo’s Good Neighbor Policy, Bold Foreign Ministry Appointments”, Indonesia Business Post, October 21, 2024. https://indonesiabusinesspost.com/2963/Politics/reshaping-diplomacy-prabowos-good-neighbor-policy-bold-foreign-ministry-appointments Accessed July 22, 2026. 

[iii] Deng Huiru and Alexander R. Arifianto (2025). An Analysis of Indonesia’s Foreign Policy under Prabowo: Managing Great Power Relations, S. Rajaratnam School of International Studies (RSIS), December 11, 2025. https://rsis.edu.sg/wp-content/uploads/2025/12/PR_An-Analysis-of-Indonesias-Foreign-Policy-under-Prabowo-Managing-Great-Power-Relations.pdf Accessed July 22, 2026.

[iv] Chietigj Bajpaee. “Reinvigorating India’s ‘Act East’ Policy in an Age of Renewed Power Politics,” The Pacific Review, vol. 36, no. 3 (2023), pp. 631–661. https://www.tandfonline.com/doi/full/10.1080/09512748.2022.2110609#d1e128(Accessed July 22, 2026).

[v] Rushali Saha (2026). “India, Indonesia Put in Place a Blueprint for a Durable Strategic Partnership”, The Diplomat, July 9, 2026. https://thediplomat.com/2026/07/india-indonesia-put-in-place-a-blueprint-for-a-durable-strategic-partnership/Accessed July 22, 2026.

[vi] Surya Gangadharan (2026). “From BrahMos Missiles to Sabang Port, ‘India Ready To Help Indonesia’”, StratNewsGlobal, July 13, 2026. https://stratnewsglobal.com/the-gist/from-brahmos-missiles-to-sabang-port-india-ready-to-help-indonesia/ Accessed July 22, 2026.

[vii] Ananda Teresia and Saurabh Sharma (2026). “Indonesia Says It Has Entered Agreement With India to Procure BrahMos Missiles”, Reuters, March 9, 2026. https://www.reuters.com/world/asia-pacific/indonesia-says-it-has-entered-agreement-with-india-procure-brahmos-missiles-2026-03-09/ Accessed July 22, 2026.

[viii] BrahMos Aerospace (2026). “BrahMos Missile”, BrahMos Aerospace. https://www.brahmos.com/page/brahmos-missileAccessed July 22, 2026.

[ix] Scott N. Romaniuk, László Csicsmann and Amparo Pamela Fabe (2026). “China and Maritime Chokepoints: Hormuz, Malacca, and Indo-Pacific Vulnerability”, The Diplomat, May 29, 2026. https://thediplomat.com/2026/05/china-and-maritime-chokepoints-hormuz-malacca-and-indo-pacific-vulnerability/ Accessed July 22, 2026.

[x] James Guild (2024). “Indonesia’s Scorpene Submarine Deal With France, Explained”, The Diplomat, April 9, 2024. https://thediplomat.com/2024/04/indonesias-scorpene-submarine-deal-with-france-explained/ Accessed July 22, 2026.

[xi] Resty Woro Yuniar (2026). “Indonesia-India BrahMos Deal Buys Jakarta Conflict Insurance”, South China Morning Post, July 8, 2026. https://www.scmp.com/week-asia/politics/article/3359837/indonesia-india-brahmos-deal-buys-jakarta-conflict-insurance Accessed July 22, 2026.

[xii] Dalip Singh (2026). “Armenia and Saudi Arabia Among Six Nations Eyeing India’s Battle-Tested Astra Missiles”, The Hindu BusinessLine, July 20, 2026. https://www.thehindubusinessline.com/news/national/armenia-and-saudi-arabia-among-six-nations-eyeing-indias-battle-tested-astra-missiles/article71241934.ece Accessed July 22, 2026.

[xiii] Akhil Kadidal (2026). “Indonesian Air Force Inducts New Aircraft, Weapons”, Janes, May 19, 2026. https://www.janes.com/defence-intelligence-insights/defence-news/defence/indonesian-air-force-inducts-new-aircraft-weapons Accessed July 22, 2026.

[xiv] Rushali Saha (2026). “India, Indonesia Put in Place a Blueprint for a Durable Strategic Partnership”, The Diplomat, July 9, 2026. https://thediplomat.com/2026/07/india-indonesia-put-in-place-a-blueprint-for-a-durable-strategic-partnership/Accessed July 22, 2026.

[xv] Ministry of External Affairs, Government of India (2026). India-Indonesia Joint Statement on the State Visit by Prime Minister of India to Indonesia

[xvi] Rajesh Kumar Singh (2026). “Building Defence-industrial Resilience” (As Delivered), 23rd IISS Shangri-La Dialogue, International Institute for Strategic Studies (IISS), May 30, 2026. https://www.iiss.org/globalassets/media-library---content--migration/files/shangri-la-dialogue/2026/transcripts/ss3/rajeshkumarsingh_asdelivered.pdf Accessed July 22, 2026.

[xvii] Ministry of External Affairs, Government of India (2026). India-Indonesia Joint Statement on the State Visit by Prime Minister of India to Indonesia

[xviii] The Economic Times (2025). “Countries With the Longest Coastlines in the World: Indonesia (54,716 km)”, The Economic Times, June 18, 2025. https://economictimes.indiatimes.com/nri/visit/countries-with-the-longest-coastlines-in-the-world/indonesia-54716-km/slideshow/121927618.cms?from=mdr Accessed July 22, 2026.

[xix] Surya Gangadharan (2026). “From BrahMos Missiles to Sabang Port, ‘India Ready To Help Indonesia’”, StratNewsGlobal

[xx] Ministry of External Affairs, Government of India (2022). “Question No. 4832: Indian Trade Through South China Sea”, Ministry of External Affairs, April 1, 2022. https://www.mea.gov.in/lok-sabha?dtl/35118/question+no+4832+indian+trade+through+south+china+sea Accessed July 22, 2026.

[xxi] Department of Economic Affairs, Ministry of Finance, Government of India (2026). “Record of Discussions of the 142nd Meeting of the Public Private Partnership Appraisal Committee (PPPAC)”, Public Private Partnerships in India, March 19, 2026. https://www.pppinindia.gov.in/docs/document/pppac/RoD%20of%20142nd%20Meeting%20(1).pdf Accessed July 22, 2026.

[xxii] Ministry of External Affairs, Government of India (2026). India-Indonesia Joint Statement on the State Visit by Prime Minister of India to Indonesia

[xxiii] Ananda Teresia (2026). “Indonesia Identifies Eight Blocks With Large Rare Earth Reserve Potential”, Reuters, February 9, 2026. https://www.reuters.com/world/asia-pacific/indonesia-identifies-eight-blocks-with-large-rare-earth-reserve-potential-2026-02-09/ Accessed July 22, 2026.

[xxiv] Rare Earth Mining Editor (2026). “India Rare Earth”, Rare Earth Mining, March 2026. https://rare-earth-mining.com/india-rare-earth/ Accessed July 22, 2026.

[xxv] Organisation for Economic Co-operation and Development (OECD) (2025). “Policy Initiative”, STIP Compass: Science, Technology and Innovation Policy (STIP) Compass. https://stip.oecd.org/stip/interactive-dashboards/policy-initiatives/2025%2Fdata%2FpolicyInitiatives%2F200002862 Accessed July 22, 2026.

[xxvi] Danantara Indonesia (2026). “Danantara’s Advanced Materials Industry Dialogue”, Danantara Indonesia, July 14, 2026. https://www.danantaraindonesia.co.id/media-center/press-releases/danantara-advanced-materials-industry-dialogueAccessed July 22, 2026.

[xxvii] Ruth Dea Juwita (2026). “New State Miner Perminas Signs MoU on Gabon Rare Earth Project”, The Jakarta Post, February 18, 2026. https://www.thejakartapost.com/business/2026/02/18/new-state-miner-perminas-signs-mou-on-gabon-rare-earth-project Accessed July 22, 2026.

[xxviii] Department of Defence Production, Ministry of Defence, Government of India (2026). “Advanced Light Helicopter Mk III – ALH Mk III (Dhruv)”, Department of Defence Production, July 21, 2026. https://www.ddpmod.gov.in/resources/products/advanced-light-helicopter-mk-iii-alh-mk-iiidhruv Accessed July 22,

[xxix] Bell Textron Inc. (2026). “Bell 412”, Bell Flight. https://www.bellflight.com/products/bell-412 Accessed July 22, 2026.