PM Modi’s visit to Indonesia

On May 29^th, Prime Minister Narendra Modi embarked on a three nation trip. The first stop is Indonesia, which marks the first time Prime Minister Modi had visited the region. He is seeking to enhance bilateral ties and strategic cooperation between the two countries.

Background

India enjoys a cordial and friendly relationship with Indonesia. The ties between the two neighbours extends back to at least two millennia. Ties were further strengthened post Indian independence in 1950. That year, Sukarno, the first ever President of Indonesia called on the two countries to "intensify the cordial relations" that had existed between the two countries "for more than 1000 years" before they had been "disrupted" by colonial powers.

India has an embassy in Jakarta and Indonesia operates an embassy in Delhi. India regards Indonesia as a key member of ASEAN. Both nations had agreed to establish a strategic partnership. The two countries have significant bilateral trade. India and Indonesia are among the largest democracies in the world. The two nations are member states of the G-20, the E7 (countries), the Non-aligned Movement, and the United Nations.

Economically, both countries are two of the fastest growing economies in the region. India is Indonesia’s largest trading partner among South Asian countries and fourth biggest trading partner in the world. Bilateral trade reached $18.13 billion last year, up 22.34 % from 2016.

The Look East policy

India's Look East policy is an effort to cultivate extensive economic and strategic relations with the nations of Southeast Asia in order to bolster its standing as a regional power and a counterweight to the strategic influence of the People's Republic of China.

In 1991, India adopted its "Look East" policy as part of a focus to strengthen trade and strategic relations with Southeast Asian nations. But progress has been slow. India's trade with ASEAN has grown from $2.9bn in 1993 to $71bn in the last year, compared with China-ASEAN trade at $450bn. Beijing aims to take the trade to $1 trillion by 2020.

After coming to power in 2014, Modi rechristened the "Look East" policy to "Act East", with commerce, connectivity and culture as the guiding themes to boost engagement with the bloc.

Analysis

Indian Prime Minister Narendra Modi is scheduled to participate in a number of high level meetings in Indonesia. He will be meeting his counterpart in Indonesia seeking to enhance bilateral cooperation in a broad range of areas, including maritime, trade and investment. He will also be visiting Singapore and Malaysia as part of this tour.

Indian Ambassador to Indonesia Pradeep Kumar Rawat further elaborated on this visit noting, “The engagement is ... very deep. We have been strategic partners since 2005 and as close maritime neighbours, there are issues which concerned both of us in a very fast developing, evolving global situation. There are issues relating to maritime, economic development.”

Prime Minister Modi will be meeting Indonesian President Joko Widodo on Wednesday and they will be discussing terrorism, Indo-Pacific partnership and methods to improve economic ties between the two countries. It should be noted that in the recent years, Indonesia has witnessed a number of terror attacks orchestrated by growing number of sleeper ISIS cells in the region.

A key highlight of the visit could be an agreement that allows India access to the strategic island of Sabang at the northern tip of Sumatra and close to the Malacca Strait. The Indian Prime Minister will also be attending events like CEO Business Forum organised by the Indonesian Chamber of Commerce and the Industry, and the Confederation of Indian Industry. PM Modi took to his social media platforms to discuss the visit noting, “This is my first visit to Indonesia as Prime Minister. I am looking forward to my discussions with President Widodo on 30 May, as also to our joint interaction with the India-Indonesia CEOs Forum. I will also address the Indian community in Indonesia. Both countries are multi-ethnic, multi-religious, plural and open societies. I am confident that my visit to Indonesia will create greater synergy between Asia's two largest democracies and further elevate our bilateral ties.”

In Singapore, he will deliver the keynote address at Shangri-La Dialogue, an annual security meet, on June 1. "This will be the first time that an Indian Prime Minister would deliver this address. It would be an opportunity to articulate India's point of view on regional security issues and maintenance of peace and stability in the region. In Singapore, I will be focusing on enhancing India-Singapore partnership in areas of Fintech, skill development, urban planning and artificial intelligence. Singapore entities have become major partners with India in areas like urban development, planning, smart cities and infrastructure development," noted PM Modi.

Assessment

Our assessment is that PM Modi’s visit to Indonesia is a key development in his “Act East” policy. Both nations are two of the largest democracies in the world and are fast growing economies. If India is able to strike an agreement to be allowed to invest in the port and the economic zone in the island of Sabang, which is strategically close to the Strait of Malacca, it could give a great fillip to India’s Look East Policy.