As Indonesia's President Yudhoyono is in India, the two countries have pledged to strengthen their counter-terror collaboration by signing a treaty on extradition and announced the launch of negotiations on free trade.
Indonesian President Susilo Bambang Yudhoyono at a ceremonial reception in New Delhi
This is Susilo Bambang Yudhoyono's second trip to India as Indonesian president. During his first visit in 2005, ties between Indonesia and India were raised to the level of a "strategic partnership."
This time round, 11 agreements in the areas of air services, petroleum and gas, education, and science and technology, have already been signed, and the two sides have also set themselves a new bilateral trade target of $25 billion by 2015.
Sudhir Devare, Director General of the Indian Council of World Affairs and a former ambassador to Indonesia, thinks India’s engagement with Indonesia should be given a further boost because "it is a country which is destined to play a more and more important role."
Indonesian President Susilo Bambang Yudhoyono shakes hands with Indian Prime Minister Manmohan Singh
"As we continue to pursue our Look East Policy, our engagement and growing integration with the Asia-Pacific, Indonesia is becoming a key player. I think that our engagement has not been adequate enough. I think it is about time, thus this visit could not have been more timely," he said.
Indonesia is attractive for Indian investments
Bilateral trade tripled over five years to $11.8 billion in 2009/10, making Indonesia India's second-largest trading partner in the Association of South-East Asian Nations (ASEAN) region after Singapore.
Indonesia has become an attractive destination for Indian investments in textiles, steel, the automotive sector, banking, energy, railways and natural resources.
Shankari Sundararaman, an expert on Southeast Asian Studies at Delhi's Jawaharlal Nehru University, said that there had to be more synergy on the strategic level between both sides.
"If you look at the actual economic aspects of ties between Indonesia, I think they are already on the right path. But on the political and strategic fronts, we have not yet reached the level of integration we need as two countries that are significant players on the Asian continent," she said, adding that the two sides had to tackle their political and security interests together.
More sharing of intelligence
Analysts say that India and Indonesia have to have a coordinated approach to China's rise
In their wide-ranging talks, the Indian Prime Minister Manmohan Singh and President Yudhoyono resolved to improve the sharing of intelligence, developing more effective counter-terrorism policies and enhancing liaison between the two countries’ law enforcement agencies.
Sundararaman also pointed out that both countries had an important role to play in the region within the context of a rising China.
"They have to integrate in order to understand that there is a dragon in the region," she said suggesting that they should ask themselves "how to approach the whole issue of whether China becomes competition or a complementary power."
President Yudhoyono will be the chief guest at India's Republic Day Parade on Wednesday.
Author: Murali Krishnan
Editor: Thomas Baerthlein