With its eyes on China, Delhi woos Jakarta

In a sign of the new significance that India is attaching to its ties with Southeast Asia, India hosted Indonesian President Susilo Bambang Yudhoyono at its Republic Day celebrations this year.

Sixty years go then Indonesian President Sukarno was the chief guest at the first Republic Day celebrations in 1950. This visit was intended to give a boost to India's 'Look East' policy, underscoring the need for greater integration and deeper engagement between India and East Asia in trade and other strategic sectors.

Prime Minister Manmohan Singh, who travelled to Japan and Malaysia for bilateral visits and to Vietnam for the 8th ASEAN-India Summit last November, has made it clear that his government's foreign-policy priority will be East and Southeast Asia, which are poised for sustained growth in the 21st century.

The basis of India-Indonesia partnership dates back to the founding fathers of these two nations -- Jawaharlal Nehru and Sukarno -- who offered a distinct foreign policy world view that drew on their shared colonial experiences. They visualised an Asian region that could challenge the Cold War threat perceptions of the two superpowers. Nehru and Sukarno were among the founder members of the Non Aligned Movement.

In the contemporary context, the rise of China has drawn the two States closer. The last few years have witnessed a new phase in this relationship where the two States have pushed their ties to a historic high with strong emphasis on economic and security issues. India with its 'Look East' policy decided to substantially enhance its presence in the region while Indonesia took the lead in bring India closer to ASEAN.

The changing strategic landscape of Asia during the post Cold War era has broadened the canvas of India's engagement with Indonesia. Both want to seize the opportunities being offered by the landmark economic growth being witnessed by the Asian region.

Economic engagement between the two is growing rapidly and will gain further momentum with the signing of the India-ASEAN free trade agreement last year. Indonesia is an important source of energy and raw materials for India.

Bilateral trade exceeded the target set by the two states in 2010 of $10 billion. Major Indian companies, including the Birla group, the Tatas, Essar, Jindal Steel, Bajaj Motors, are now operating in Indonesia. Indian investment is spread across a range of areas including banking, mining, oil and gas, iron and steel, aluminium, IT, textiles and telecommunications.

It was in 2005 that the two signed the strategic partnership agreement and in 2006 a defence cooperation agreement was announced. Negotiations on a Comprehensive Economic Cooperation agreement have already begun. Several other treaties including an extradition treaty and Mutual Legal Assistance treaty were signed during the Indonesian president's visit.

Being the most formidable military power in Southeast Asia, Indonesia can effectively work with India in ensuring safety of the Sea Lanes of Communication (SLOCs) and tackle non-traditional security challenges in the Indian Ocean.

Both have a vested interest in ensuring that China's hegemony in the region does not go uncontested. Their location makes then crucial in the emerging maritime calculus in the region as they together control the entry point from the Indian Ocean to the Bay of Bengal in the north and Malacca Straits to the east.

Viewing Indian maritime presence as largely benign, Indonesia has openly invited India to help the littoral States in the region in maintaining security in the Malacca Straits. Jakarta now also views India as a major source of military hardware. Joint naval exercises and patrols as well as regular port calls by their respective navies have been a regular feature of India-Indonesian naval cooperation for some time now.

Cultural links between the two nations have always been significant and they are flourishing. After all, Indonesia's name is derived from the Latin word 'Indus,' meaning India. As the most populous Islamic nation committed to pluralism and democracy, India has huge stakes in the political and economic success of Indonesia.

Indonesia's role has been and will remain critical in supporting India's engagement with its Southeast Asian neighbours. And as the US tries to project Indonesia as a bastion of moderate Islam and political stability, India will only reinvigorate its ties with Jakarta. India has made a strong case for its growing relevance in the East Asian regional security and economic architecture in recent years.

India's free-trade agreement with ASEAN, signed last year, commits New Delhi to cut import tariffs on 80 per cent of the commodities it trades with ASEAN, with the goal of reversing India's growing marginalisation in the world's most economically dynamic region.

Having signed a free-trade pact for goods last year, India and ASEAN are now engaged in talks to widen the agreement to include services and investments. India hopes to increase its $44 billion trade with ASEAN to $50 billion by next year.

New Delhi's ambitious policy in East and Southeast Asia is aimed at significantly increasing its regional profile. Smaller States in the region are now looking to India to act as a balancer in view of China's growing influence while larger States see it as an attractive engine for regional growth.

It remains to be seen if India can indeed live up to its full potential, as well as to the region's expectations. But with the wooing of Indonesia, India is signaling that it is indeed serious about its presence in Southeast Asia.