India and Indonesia have been Comprehensive Strategic Partners since 2018.[1][2] Their engagements now include regular meetings in the political, defence, security, and soon, defence manufacturing spheres both in the bilateral format and at multilateral forums. A showpiece of this six-year-old partnership is the soon-to-be-constructed strategic deep sea Sabang port in Banda Aceh, which India is helping Indonesia develop.[3] India’s Act East Policy and engagement in the Indo-Pacific further cements this special bilateral, as ASEAN, of which Indonesia is a key member, is viewed as the ‘bridge’ between the Indian and Pacific oceans.
Upgraded ties have translated into an acceleration in bilateral trade to $38.84 billion, making Indonesia India’s largest trading partner in ASEAN.[4] Today this trade is dominated by coal and palm oil imports to India, and refined petroleum products, commercial vehicles, steel products, bovine meat, and agricultural goods exports to Indonesia, where once cloth and spices ruled.
India and Indonesia’s easy connectivity in the age of sail because of the regular monsoon wind system has ensured two millennia of seafaring trade[5] resulting in transmissions of faiths[6] and culture through dance, cuisine, literature[7], and of finance, with the Hundi in popular use in the Indian Ocean trade. It is no coincidence that the Indonesian currency is the Rupiah as the two nations have engaged actively in trade since medieval times. Later, in the 19th century, when Indian plantation labour migrated to Dutch Indonesia, and they made the Indian rupee a familiar currency in their new abode.[8]
During the first to the 14th centuries, it was India’s Bay of Bengal facing regions[9] and its southwest Malabar Coast that traded with the Indonesian ‘Spice Islands.’ The Malabar ports like Muziris, Calicut (Kozhikode) and later Cochin (Kochi)[10] with their own spices and voluminous spice markets were mandatory stops[11] for Arab dhows voyaging between the Arabian Sea and the Bay of Bengal. The business was dominated by the Kutchi and Kathiawadi Gujarati-speaking merchants[12], who were familiar with Arab seafarers from the Persian Gulf and the Red Sea. as the Gujarat ports of Mandvi and Khambhat were active in the coastal trade of the North Arabian Sea.
The port city of Bombay played no part in this medieval seafaring ecosystem that depended wholly on the monsoon winds to carry goods from one end of the Indian Ocean to the other. It emerged in the 18th century when the Mughal port of Surat in Gujarat went into irreversible decline[13] and was brought under the English East India Company’s Presidency of Bombay in 1800 C.E. Bombay began exporting Indian cloths to Indonesia and became an entrepot for the export of Indonesian spices during the colonial period, The entire ecosystem of the spice and cloth trade shifted to the city when Gujarati merchants and bankers from Surat opened their Peedhis (offices) in the city. They congregated in sizeable numbers in the Mandvi precinct located near the docks on Mumbai’s eastern foreshore, whose streets are still popularly known, even if renamed, as Mirchi (Chilly) Galli and Kathi (Coir) Galli, an indication of the market located on these streets.
Jaisinh Mariwala, whose family has been in the spice trade for 125 years and whose forefathers migrated to Mumbai from a small village in Saurashtra, remembers that one branch of his family went to Zanzibar, and one settled in the Malabar Coast. With this initial family network – pepper from Kerala, and cloves and copra from Zanzibar – the Mariwala family began dealing in Indonesian spices too. Most Chinese and Indian traders in Jakarta[14] always had an office in British colonial Singapore, the centre of international trade in the region. “Jakarta developed only after Indonesian independence and today there are sizeable Indonesian trading houses,” he says.[15]
Another feature of this trade was that before the Second World War, spices were exported to Europe and the United Kingdom only through English or European trading houses established in Kerala although their main suppliers were Indian and Chinese merchants in Jakarta and Singapore, and Gujaratis and Marwaris in Malabar and Bombay. “We had to buy the pepper, process, and package it for a Volkart, Aspinwall, William Good Acre and others,” Mariwala says. He recalls that his father received his first order from London during the War, which he shipped under his name. Unfortunately, the first consignment was a total write-off as the ship carrying this freight sank en route.
The War was a turning point for this trade both in India and in Indonesia. Indonesia became independent on 17 August 1945, and India two years later, on 15 August 1947. The primacy of the English and European trading houses receded and Indian spice traders, Indonesian and Chinese began exporting under their names and brands. Indonesia opened its first consulate and consular residence in India in Bombay in 1951 at 17, Altamount Road in two old bungalows that stood on the main road.[16] The Indonesian consulate shifted in December 1988 to an adjoining building on 17 Altamount Road where it has been since. The main function of this consulate in the early years was issuing visas for Bombay’s traders.
The culture of India continued to cast its spell on modern Indonesia. Bombay’s silent mythological films since the 1910s found a ready audience in Indonesia (and across Southeast Asia) because audiences in this region could instinctively relate to stories from the Ramayana, Mahabharata, and Panchatantra, due to centuries of pre-colonial interactions between the people of the Subcontinent and Southeast Asia.[17] With talkies films,[18] language became a barrier to the export of films. After India’s Partition, a large number of Sindhi refugees chose to settle in Jakarta because Sindhi firms had a strong presence in Jakarta, Semarang, Surabaya, and across Java. A few from this community now run big film production houses like M. D. Entertainment, Rapi Films, and Soraya Intercine Films, contributing nearly 60% of all films made in Indonesia.[19] The Sindhis also flourished in the textile trade, setting up shops and department stores, particularly in Sumatra and Western Java. [20]
The political convergence of independent India and Indonesia began in the 1950s when they took the first steps to adopt a foreign policy of non-alignment. The idea was sown at the first Africa-Asia Conference of former colonies in Bandung, Indonesia, in 1955, leading to the establishment of the Non-Aligned Movement in 1961. Two of five founders were Indonesia’s first President Sukarno and India’s first Prime Minister Jawaharlal Nehru. The political bonhomie between the two nations did not immediately yield Indian investments in Indonesia or vice versa. It was only in the 1970s that Bombay business groups like the Birlas, Godrej, and Singhanias, ventured into Indonesia for business. The Aditya Birla Group still has its legacy textile mill PT Elegant, Forbes, Forbes & Campbell had PT Gokak Indonesia, Singhania’s Raymond Industries set up PT JayKay Files (est. 1974), and the Godrej group entered the Indonesian market in 1975.[21]
A turning point in the political relationship was 1991 when India adopted its Look East policy, which boosted bilateral relations between the two nations on multiple levels including security, defence, and infrastructure. This prompted the upgradation of the Consulate in Bombay to the Consulate General of Indonesia in 1995, to empower it to deal with an upswing in trade and investments. According to the India-Indonesia Business Association (est. 1995) trade jumped in ten years from $4.3 billion (2004-05) to $16.20 billion (2014), and today it has more than doubled to $38.84 billion.
Like all strong relationships, India and Indonesia ties are built on a bedrock of centuries-old history. Old trading ties abide, as in spices, but the old connections have matured over time, with nuance and understanding, as it has in the 21st century.
Sifra Lentin is Fellow, Bombay History, Gateway House.
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References
[1]Ministry of External Affairs. “India-Indonesia Joint Statement during visit of Prime Minister to Indonesia”, Media Center, 30 May 2018. https://www.mea.gov.in/bilateral-documents.htm?dtl/29932/IndiaIndonesia+Joint+Statement+during+visit+of+Prime+Minister+to+Indonesia+May+30+2018
[2] India in its Act East policy and as part of the QUAD policy, views ASEAN, particularly the Indonesian archipelago with its sprawling Exclusive Economic Zone, as the ‘bridge between the Indian and the Pacific oceans’, just as it was in the historic past.
[3] Aceh, where Sabang is located, is 80 nautical miles from the southernmost island of the Andaman & Nicobar archipelago. Both islands mark the entry point into the busy shipping channel of the Malacca Straits.
[4] Embassy of India, Jakarta, “India-Indonesia Economic and Commercial Relations” https://www.indianembassyjakarta.gov.in/
[5] The annual Bali Yatra festival in Cuttack, Odisha, has been celebrated for centuries. It marks the end of the Southwest Monsoon and the beginning of the North East Monsoon, a time when merchants from ancient Kalinga (modern Odisha) undertook the voyage to Bali, an important port and market then.
[6] Hinduism, Buddhism, and Islam all travelled from the Indian subcontinent to the Indonesian islands. All three religions have interacted with local beliefs and practices in Indonesia to create their unique practices, traditions, sacred spaces, and literature.
[7] Religious epics the Ramayana and the Mahabharata are found in different versions in Indonesia. It is recognised that there are 730 recognised versions of the Ramayana in the Bay of Bengal and BIMSTEC nations. The Buddhist Jataka tales are also popular in Indonesia.
[8] The Mughal Surat Rupee, a prototype for the English East India Company’s Bombay Rupee, was introduced by the VOC or the Dutch East India Company into Dutch Batavia (old Jakarta) in the 17th century as all Dutch ships would stop at Surat to buy cotton piece goods and indigo to sell in Southeast Asia and the Far East. These would be countermarked by the VOC to indicate their changed circulatory status. The Dutch also introduced the Dutch Guilders and Doits in 1747, but the Indian Rupee remained a popular currency for long. Bhandare, Shailendra, ‘Money on the Move: The Rupee and the Indian Ocean Region’, in Ray, Himanshu Prabha, and Alpers, Edwards A., eds, Cross currents and community networks: The History if the Indian Ocean World, New Delhi: Oxford University Press, 2007, pp. 214, 216.
[9] Today’s Indian states of West Bengal, Orissa, Andhra Pradesh, and Tamil Nadu, and in the west the southernmost state of Kerala.
[10] Cochin Port is believed to have been formed in 1341 AD when the Periyar River flooded heavily, silting up the Muziris harbour and creating a new opening at Cochin. Over time, Cochin became a major trading hub.
[11] The Malabar Coast which is part of today’s Indian state of Kerala is a rich spice-growing region. It is famous for its pepper. The most famous is the Tellicherry black pepper, a premium pepper known for its large size and strong flavour. Indonesia is also known for its pepper, cloves, mace, and nutmeg, and today for its milder-flavoured white pepper.
Pepper was much sought after in the West as it was used as a condiment for meats by the Europeans. According to Jaisinh Mariwala, whose surname is from the Gujarati word Mari meaning pepper, his family spice business used to export Tellicherry pepper to Italy. It was used in Italian salami because of its size, flavour, and the larger quantity of pepperine oil it gave. (Interview with Jaisinh Mariwala by the author on 17 September 2024).
[12] There were other communities too like the Gujarati-speaking Bohra, Khoja, and additionally in Malabar Jews and Moplas (Malabar Muslims of mixed Arab and indigenous lineage).
[13] There were multiple reasons why Surat went into decline: Maratha raids on the city, political instability after the death of Emperor Aurangzeb in 1707, ships with deeper draughts, and the shift of the English East Indian Company headquarters to Bombay in 1687. This was followed by bringing Surat under the administration of the presidency of Bombay in 1800.
[14] Batavia or the old city of Jakarta was the capital city of the Dutch East Indies.
[15] Indonesian palm oil, a commodity that has today overtaken in volume and value the current bilateral trade in spices, is also a traditional item of trade.
[16] The landmark today for 17 Altamount Road is Prithvi Apartments.
[17] Barnouw, Eric, & Krishnaswamy S., Indian Films, New York & London: Colombia University Press, 1962
Also see Dalrymple, William. The Golden Road: How Ancient India Transformed the World, Bloomsbury Publishing, 2025.
[18] The first talkies film to be released in India was Alam Ara in 1931. The transition to talkies did not happen overnight.
[19]Lentin, Sifra. “Indian diaspora: soft power in the Indo-Pacific”, Gateway House, 31 March 2022. https://www.gatewayhouse.in/indian-diaspora-soft-power-in-the-indo-pacific/
[20] Markovits, Claude, The Global World Of Indian Merchants 1750-1947: Traders of Sind from Bukhara to Panama, Cambridge: Cambridge University Press, 2000, pp.128,134, 154 n. 87.
[21] In 2010, Godrej Indonesia was set up and it manufactures Fast Moving Consumer Products. See https://www.godrejindonesia.com/know-us/godrej-indonesia