On April 30, 2024, the Indian Embassy in Indonesia hosted a defence industry exhibition at the Sultan Hotel Jakarta. This event was particularly noteworthy for several reasons: firstly, it marked the inaugural exhibition organized by India in Indonesia as part of celebrating 75 years of bilateral relations. Secondly, the participation of approximately 36 weapon system manufacturers was remarkable, especially when compared to the Indian Defence Research and Development Organisation's (DRDO) involvement in the previous Indodefence Expo 2022. This article posits that India is recognizing its potential as a primary successor to Russia as Southeast Asia's principal non-NATO technology provider, with Indonesia as a key target market. The question posed is whether India's strategic moves are sufficient to establish it as a credible partner in Indonesia's defense technology and industry advancement.
....India is recognizing its potential as a primary successor to Russia as Southeast Asia's principal non-NATO technology provider....
India stands as one of Indonesia's neighbouring countries with close geographical proximity yet perceived distance, despite sharing maritime borders in the Andaman Sea, the Indian Ocean, and the waters of Great Nicobar Island. The foundation of bilateral defence cooperation was laid with the Defence Cooperation Framework Agreement in 2001. Since then, both nations have bolstered collaboration in information exchange, coordinated patrols, and joint exercises in bilateral and multilateral formats. The military ties between the two nations were evident in 2021 when India extended assistance during the rescue of the Nanggala submarine. Continuing this cooperation, in 2024, India sent its officers to participate in the Indonesian Armed Forces' (TNI) SESKO program. However, despite the progress in bilateral relations, cooperation between Indonesia and India has not yet fully extended to the defense industry and technology sectors.
For India, deepening cooperation between Indonesia and itself in the defence industry and technology sectors would be strategically advantageous. Under Prime Minister Narendra Modi's leadership, India has reinvigorated its ‘Look East Policy’ into ‘Act East Policy’, where India position itself not only as a net security provider in the Indian Ocean but also as a crucial partner in defence technology in Southeast Asia. Hence, India aims to transition its arms production policy from mere import substitution to export orientation. India's defense industry is notably competitive, boasting three Indian-owned companies listed among the world's top 100 weapon manufacturers, with sales totaling US$6.5 billion. Despite this, India's arms exports have remained relatively modest, reaching only $540 million over the past decade according to the SIPRI Arms Transfer Database. Prime Minister Modi has set a target for Indian arms exports to reach US$5 billion globally by 2025, yet so far, only Myanmar and the Philippines in the Southeast Asian market have been penetrated by India.
Expanding cooperation with India is also pivotal for Indonesia due to several reasons
Expanding cooperation with India is also pivotal for Indonesia due to several reasons.
Firstly, both countries share a reliance on Russian-origin weaponry that requires maintenance and upgrades. India's Maintenance, Repair, and Overhaul (MRO) capabilities can significantly contribute to Indonesia's defense equipment readiness, particularly for assets like the Mi-17 helicopters.
Secondly, India presents a more neutral alternative partner compared to China. Despite some shared characteristics, such as their heritage in Russian technology and a focus on import substitution to bolster domestic capabilities, India aligns more closely with Indonesia's foreign policy principles of non-alignment and non-bloc affiliations. India's concept of strategic autonomy resonates with Indonesia's aspirations for defence industry self-sufficiency, making it a natural and compatible partner for cooperation and collaboration..
To fortify the foundation of industrial and technological cooperation between Indonesia and India, a broader approach beyond arms exhibitions is essential. Learning from Indonesia's experiences with South Korea, which encountered hurdles in accessing crucial technologies from third parties, Indonesia needs to establish regulations and institutions concerning technology secrecy protection. Conversely, India also needs to establish a clear partnership and technology transfer mechanisms, particularly concerning third-party technologies from Russia. One of India's flagship export weapon systems is BrahMos, a cruise missile developed jointly with Russia. Although India has achieved a high level of autonomy in some areas, it still relies on imported components for major conventional weapons, such as fighter jets, battle tanks and armoured vehicles, offshore patrol vessels and corvettes, and destroyers and frigates. Both countries also need to institutionalise cooperation, through annual Defence Industry Cooperation Meetings (DICM), for example. China and Turkey have been far ahead of India, having been conducting DICMs annually with Indonesia since 2011. Creating a similar platform between Indonesia and India would aid in understanding the stakeholders, mechanisms, and technological requirements of each party as a foundation for identifying mutually beneficial cooperation areas.
India Defence Industry
Rank in SIPRI | No of Workforce | Arms Revenue in USD Million (2022) | Total Revenue in USD Million (2022) | Arms Revenue as a % of Total Revenue | Signature Products | |
Hindustan Aeronautics | 41 | 24,457 | 3,460 | 3,643 | 95% | Light Combat Aircraft, Helicopter. UAV, MRO, Space Technology, etc. |
Bharat Electronics | 63 | 9,000 - 11,000 | 1,920 | 2,208 | 87% | Avionics, Electro-optics, Land-based radar, C4l, Battery, Unmanned System, etc. |
Mazag on Dock Shipbuilders | 89 | 4,972 | 1,000 | 997 | 100% | Submarine, Destroyer, Frigate, Corvette, etc. |
Source: SIPRI and other sources
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Defence Policy and Strategic Division
This article is also available in Indonesian
Wonderfully written article. Quite balanced.
India and Indonesia are natural partners, historically and in contemporary times for regional and global stability & security. Progress of both nations after WW II has been similar and thus same challenges faced in Security & Defence domains, including Defence Industry, ToT, local content and Intellectual Property generation.
Immense potential to partner in each others progress & security, to provide context based solutions in achieving high growth trajectory for realising national aim of developed & advanced India and Indonesia.