India And Indonesia – An Analysis Of Our Foreign Policy

Posted on February 22nd, 2010 at 8:41 am by Akhyari


India’s rise in profile in the ASEAN region is because of the acceptance of her stature by major ASEAN countries such as Indonesia. Over the years the two countries have engaged in cooperative initiatives on bilateral and multilateral issues.

A STRONG functional democracy and a sustained economy even in the light of the recent global recession trends elevates India to a position, where she can negotiate and dictate terms to suit her interests, thereby, enabling her to construct an independent foreign policy.

Along with building strong ties with the world super power, the United States of America and advanced European countries, India has also successfully established itself in the Asian region. One of India’s strong allies in this region is Indonesia.

The India-Indonesia history dates back to 1955 when the then Indian Prime Minister Jawaharlal Nehru and Indonesian President Sukarno along with three others founded the Non-Aligned Movement.

In 1950, Sukarno called upon the people of Indonesia and India 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 had supported Indonesian independence while Indonesia played a key role in providing India access to ASEAN.

The Bandung Afro-Asian Conference of 1955 witnessed the zenith of the bilateral relations between Indian and Indonesia. The profound understanding between the then Indian Prime Minister Jawaharlal Nehru and Indonesian Prime Minister Sukarno effectively put forward the concerns and interests of non-aligned countries at international forums.

However, it was during the 1965 Indo-Pak war when the Indonesian government chose to support Pakistan by supplying them with weapons that the relationship between India and Indonesia turned sour. The Jakarta government also apparently staged a mob attack on the Indian embassy in Jakarta.

Hereafter, it was only after the launch of India’s Look East policy that its relationship with the ASEAN and its bilateral engagement with Indonesia assumed a mutually reinforcing character.

China as a rising power in Southeast Asia has also played a key role in getting the two countries closer. For, it was the need to balance against China that created a common ground between the two countries for building up strategic partnership in the region.

Commitment from the mutually enforcing bilateral relationship along with India’s commitment to its growing strategic engagement with the ASEAN has provided impetus to the trade and defence engagements between the two countries. India and Indonesia signed a Bilateral Agreement on Cooperative Activities in the Field of Defence in 2001.

Apart from equipments for the Indonesian navy, the two countries are exploring other areas of defence and trade.

In November 2005 when the Indonesian President, Susilo Bambang Yudhoyono visited India, the two countries agreed to hold an annual “strategic dialogue” to commence by the first half of 2006. As per the agreement, India has been providing training to Indonesian military officers under the ITEC-I program.

The growing menace of terrorism also saw the two countries engage in July 2004, where a Memorandum of Understanding on Combating International was signed. This provided for the formation of a Joint Working Group (JWG) on Counter Terrorism.

An important area of bilateral cooperation is the issue of maritime terrorism and piracy in and around the Malacca Strait. The main elements in this have been visits of Indian navies to Indonesian ports and vice-versa, conducting joint naval exercises, escorts of Indonesian ships in the Andaman Sea and so on.

Economic and Commercial Relationship

In order to boost the economic activities, both India and Indonesia signed a bilateral Agreement on avoidance of Double Taxation in January, 1986. During the G-15 meeting in Februaury 1999, the two countries also signed an Agreement for the Promotion and Protection of Investments, which came into force in January 2004.

During the 2005 visit of the Indonesian President, the two countries also signed a Memorandum of Understanding which included the formation of Joint Study Group. This group was to examine the feasibility of entering into a Comprehensive Economic Cooperation Agreement.

The total value of bilateral trade has gone up from US$1.12 billion in 1995-96 to US$2.5 billion in 2003-04 and reached US$4 billion in 2005. The bilateral trade target has now been set at US$10 billion by 2010.

India imports palm/vegetable oil – crude and processed – coal, petroleum and paper products, and spices whereas major Indonesian imports are textile yarn, chemicals, electric power machinery and parts, refined petroleum products, iron and steel goods, wheat, rice and sugar. India is the largest importer of crude palm oil and Indonesia has become India’s second largest trading partner in ASEAN after Singapore.

India is now planning of procuring natural gas from Indonesia through an under-sea pipeline from Aceh to the Nicobar Islands.

Challenges and Opportunities
While the ‘China threat’ theory has helped India gain Indonesia’s cooperation in regional strategic deliberations and entry into forums such as ASEAN, ARF and the East Asian Summit, the Pakistan factor has limited their bilateral c0operation.

Issues such as the Asian candidature in an expanded UN Security Council have seen the two countries adopt competitive approach. However, they have worked together amicably in international forums such as World Trade Organization (WTO).

In the economic sector, issues of comprehensive trade agreement or preferential trade agreement have been delayed due to difference over the listing of protected goods. While Indonesia wants palm oil in the free trade list, India has kept it in the list of protected items to provide security to palm oil producers in its south.

The limited nature of international transportation between the two countries has been another matter of concern in the area of bilateral economic and trade links. While Air India flies only once a week to Indonesia, Air Garuda, Indonesia’s national carrier does not have any flight to India.

Over the years the two countries have moved closer to each other and engaged in cooperative initiatives on bilateral and multilateral issues. Despite challenges, the two countries have reassured each other of continued cooperation in different sectors without letting divergences hinder their bilateral engagement. For example, during his visit to India in 2000, the then Indonesian President, Abdurrahman Wahid, decided not to go to Pakistan as a major political gesture to Indian establishment.

The geostrategic location of Indonesia’s on India’s South Eastern flank makes cooperation with them an important priority in India’s economic, foreign and security policies.

India’s rising profile in the ASEAN region has come about not only because of its great power projection but also because of the acceptance of that stature by the major ASEAN countries such as Indonesia.

Source : MeriNews

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