India-Indonesia ties seen gaining momentum as Jakarta looks to India’s development model; all eyes on PM Modi's visit

Bilateral ties between India and Indonesia are set to gather steam this week with Prime Minister Narendra Modi scheduled to visit the foreign Asian country from July 6 to July 8. According to sources, bilateral talks between the two countries are set to move beyond traditional diplomacy towards cooperation in technology, governance and development.

Indonesia now views India not only as a strategic partner but also as a development model, with growing interest in adopting several Indian initiatives across digital governance, financial markets, healthcare, agriculture and defence, said one of the sources.

PM Modi's official Indonesia visit

The PM's visit comes at a time when Indonesia is looking to draw from India’s experience in building large-scale digital public infrastructure and implementing public welfare programmes.

Officials noted that several initiatives inspired by Indian models are expected to feature prominently during the PM's visit to Indonesia.

Digital connectivity in spotlight

Among the key areas of cooperation is digital connectivity, with both Asian countries already working on linking the Unified Payments Interface (UPI) with Indonesia’s QRIS payment system -- a move widely seen as enabling seamless cross-border digital payments for businesses and travellers.

This initiative is expected to provide a major boost to tourism, trade and digital commerce between the two countries.

The Indonesia Open Network (ION) has been developed on the lines of India’s Open Network for Digital Commerce (ONDC). According to sources, the first live ION transaction is likely to take place during the Modi-Prabowo summit on July 7.

India is also extending its expertise in Digital Public Infrastructure to support Indonesia’s Digital Nusantara initiative, with platforms such as Aadhaar, UPI, DigiLocker, e-KYC and ONDC increasingly serving as reference models.

The two countries are also exploring cooperation in financial market technology. Discussions are expected around AI-based market surveillance, digital investment platforms and capital market technology, allowing Indonesia to benefit from India’s technology-driven experience in stock market operations, noted one of the sources.

Social sector collaboration seen gaining attention

Indonesia’s Free Nutritious Meals programme has drawn inspiration from India’s PM POSHAN (Mid-Day Meal) scheme.

Sources said that there is scope for cooperation based on India’s Jan Aushadhi model for Indonesia’s Red and White Village Cooperatives, with a focus on expanding affordable medicines and healthcare services in rural areas.

Defence emerging as a key pillar of ties

The two countries are looking to deepen cooperation in defence manufacturing, technology transfer, military training and maritime security. Indonesia has also shown growing interest in India’s Atmanirbhar Bharat defence production model as it seeks to strengthen its own domestic capabilities, said the sources.

India and Indonesia as economic partners

India and Indonesia have an annual bilateral trade of around $28.15 billion, making Indonesia India’s second-largest trading partner within ASEAN.

India primarily imports coal and crude palm oil from Indonesia, while exporting refined petroleum products, commercial vehicles and agricultural commodities.