A mega step in Southeast Asia's defense industry! Indonesia under the administration of President Prabowo Subianto has officially sealed a giant defense deal with Indian Prime Minister Narendra Modi.
In an official meeting at the Istana Negara in Jakarta on Tuesday, the two leaders announced the procurement contract for the BrahMos supersonic cruise missile system as well as an air-to-air missile cooperation pact.
This drastic step marks a new phase in the military strengthening of the two countries, as China's influence in the Indo-Pacific region is becoming increasingly aggressive and the commitment of the United States (US) is seen as increasingly vague.
Not Just Arms, Commodity & Mining Sectors Are Also 'Tied'
Apart from shopping for military assets, Modi and Prabowo also announced several other strategic agreements that will impact the regional commodity market:
Steel Supply Chain & Mining Technology: New cooperation to strengthen heavy industries and raw material security.
Maritime Security: Tighter joint control of the strategic maritime corridors of the Straits of Malacca and the Indian Ocean.
Preferential Trade Agreement (PTA): The two countries agreed to accelerate negotiations to reduce bilateral trade tariffs.
The meeting was celebrated with great pomp. Modi's arrival in Jakarta was greeted by a cavalry parade, a line of school children waving the flags of both countries, and a 21-gun salute.
Modi's tactic to 'Bin' the Indian Ocean From West to East
The visit to Indonesia is part of Modi's week-long tour of three major countries including Australia and New Zealand.
India's geopolitical strategy has recently been very well-organized:
Western Fortress (Indian Ocean): Previously, Modi visited the Seychelles and met with the leader of Mauritius to lock in influence in the West.
Eastern Fortress: Last week, Modi just received a visit from Japanese Prime Minister Sanae Takaichi in New Delhi, before he flew to Jakarta this week to strengthen his position at the eastern gateway.
Back Door Open: US Begins to Back Off, Gives 'Strategic Space' to China?
Why are Indonesia and India suddenly acting aggressively to strengthen relations? This all stems from a 'lukewarm' signal from Washington.
Although US Secretary of State, Marco Rubio, has just attended a Quad alliance meeting (India, Australia, Japan, US), the Pentagon recently surprised its allies by changing the name of the Indo Pacific Command back to the US Pacific Command.
This name change, coupled with President Donald Trump's series of visits to China, is seen by analysts as a clear signal that the US wants to reduce its focus on the Indo Pacific region. This action indirectly provides a very wide strategic space for Beijing to expand its dominant influence.
Indonesia's move to buy the Indo-Russian BrahMos supersonic missile proves that Jakarta wants to ensure that its defense fangs remain sharp without having to rely on the kindness of Western powers.
We expect the defense sector and steel commodity stock markets in the region to receive positive sentiment (bullish) as a result of this PTA agreement that will be accelerated. For geopolitical investors, this is a clear signal that the Asian superpower is now preparing to become independent!
Do you think Indonesia's decision to buy BrahMos missiles from India will make China 'hot ass' in the South China Sea? Try commenting below!
