The invisible bridge: How digital infrastructure is redefining India–Indonesia ties

WBiddy ground government minister Narendra Modi arrives in capital of indonesia in July, to the highest degree Indians will see a familiar diplomatic milestone — another state visit, another set of agreements, another joint statement. Yet what is taking shape quietly in Indonesia’s archipelago may represent something far more consequential for India’s long-term strategic interests: the first large-scale international deployment of India’s Digital Public Infrastructure model in a major emerging economy.Indonesia deserves far more attention in India than it currently receives. It is the world’s fourth most populous nation, home to 280 million people, the largest economy in Southeast Asia, and the third-largest democracy on Earth. Its Gross Domestic Product (GDP) has grown at around 5 percent annually for two decades, its middle class is projected to reach 140 million by 2030, and its digital economy is on course to reach United States Dollar (USD) 194.5 billion in e-commerce alone by that year. Indonesia sits astride the world’s most critical maritime trade routes, is a founding member of Association of Southeast Asian Nations (ASEAN), and has strategic influence across the Indo-Pacific that India cannot afford to overlook. And yet, for much of recent history, it has remained curiously peripheral to India’s public imagination.That is now changing — and the reason is digital infrastructure.Indonesia today is undergoing a strategic recalibration. As the country seeks greater economic sovereignty, it is simultaneously strengthening relationships across multiple centres of global power. China remains central to manufacturing and industrial investment. The United States and Western partners continue to play important roles in market access and geopolitical balancing. Europe is increasingly important for technology and critical minerals. The Middle East provides sovereign investment and food security partnerships. India, however, is emerging as Indonesia’s preferred partner for Digital Public Infrastructure — the foundational technology layer that will determine how 280 million Indonesians access commerce, finance, and government services in the coming decades.This is not a small thing. It is, arguably, the most strategically important bilateral opening India has seen in the Indo-Pacific in a generation.When President Prabowo Subianto visited India in January 2025 as chief guest at the Republic Day celebrations — marking the 75th anniversary of diplomatic relations — both governments elevated digital cooperation as a central pillar of their relationship. The joint statement recognised technology, digital transformation, and public digital infrastructure as key enablers of future economic growth. That commitment has since moved from declaration to action. In March 2025, a 10-member high-level delegation from Indonesia’s National Economic Council travelled to India specifically to study its Digital Public Infrastructure (DPI) policy framework. A formal Memorandum of Understanding (MoU) on digital cooperation was also signed during the visit and is being operationalised.The most visible result of this partnership is a project that Indians should watch closely: the Indonesia Open Network, or ION. Directly inspired by India’s own Open Network for Digital Commerce (ONDC) and built on Beckn 2.0 open protocol, ION is expected to mark its first live transaction during the Modi–Prabowo summit on July 7.ION is not a marketplace. It is a neutral digital rail — connecting buyers, sellers, logistics providers, payment systems, and financial institutions across a shared, interoperable ecosystem, modelled on the same open-protocol philosophy that underlies India Stack.The scale of the problem ION is designed to solve tells you everything about why it matters. Indonesia has over 65 million micro, small, and medium enterprises — the backbone of its economy. Yet many remain excluded from the full benefits of digital commerce. Platform commissions and fees frequently range between 25 and 40 percent of transaction value, locking small sellers, farmers, and cooperatives out of the digital economy’s gains. ION seeks to reduce that to below 8%.As T. Koshy, former managing director of ONDC and now an advisor to Indonesia’s digital commerce initiatives, has consistently argued, “Open networks succeed because they democratise opportunity rather than concentrating it.” That principle, which India pioneered, is now being exported at scale for the first time to Southeast Asia’s largest economy. Sandeep Chakravorty, India’s Ambassador to Jakarta, recently observed that “open digital networks could give Indonesia the structural leverage it needs to achieve its 8 percent growth ambition — by expanding markets for millions of small businesses that remain productive but geographically and digitally constrained.”A second initiative with enormous implications for Indian businesses and travellers is the proposed integration of Unified Payments Interface (UPI) with Indonesia’s Quick Response Code Indonesian Standard (QRIS) payment system. For Indians, QRIS is worth understanding. It is Indonesia’s national interoperable QR payment standard — launched in 2019 and now among the most successful digital payment systems in emerging Asia. By the end of 2025, QRIS had reached 59 million users and 42 million merchants, processing 13.66 billion transactions across the year — more than double its original target. QRIS Cross-Border is already operational in Thailand, Malaysia, Singapore, and Japan. Bank Indonesia is actively exploring a formal integration with UPI.For Indian businesses with trade or investment exposure in Indonesia, and for the estimated 1.7 million Indian tourists who visit Bali and other Indonesian destinations each year, a live UPI–QRIS corridor would be transformative. Beyond the convenience, it would create the foundation for a bilateral digital trade corridor of a kind that has no real precedent in India’s regional relationships. As Dr. Bayu Prawira Hie, a leading Indonesian digital transformation expert, recently observed, “Interoperability is no longer a technical issue; it is an economic leverage issue.”The third area of cooperation may carry even greater long-term significance. India’s Protean e-Gov Technologies — one of the architects behind India’s own foundational DPI layers, spanning digital identity, eKYC, eSignatures, tax modernization, pensions, and open digital commerce — is currently exploring opportunities to support Indonesia’s national DPI ambitions at the infrastructure layer. Indonesia’s National Economic Council, under the Digital Nusantara initiative, has set out to build a unified, interoperable, and scalable national digital infrastructure. The parallels with India’s own Digital India journey a decade ago are striking — and they create a genuine opportunity for Indian technology companies, not merely as vendors, but as architects of a sovereign digital state.Indonesia’s Ministry of Communications and Digital Affairs has explicitly articulated the ambition to make Indonesia a producer and exporter of digital solutions across ASEAN, not simply a consumer.Ilham Habibie, chief executive of the National ICT Council and chairman of the Indonesian Institute of Engineers, said , “Indonesia’s long-term competitiveness depends on developing sovereign digital capabilities rather than importing platforms wholesale.” That is an aspiration India understands instinctively — and it is one where Indian expertise, built through a decade of hard-won experience with Aadhaar, UPI, ONDC, and DigiLocker, is uniquely positioned to help.A fourth initiative addresses Indonesia’s capital market modernization agenda. Discussions are underway involving Indian technology firms and institutions linked to the Bombay Stock Exchange ecosystem to explore AI-powered market surveillance, integrity solutions, and digital investment platforms for Indonesia’s equity markets. India faced very similar governance and transparency challenges in its own capital markets three decades ago and responded by rebuilding them through technology and automation. That experience has direct commercial relevance in Jakarta today.For Indian readers, the larger picture is this: India has spent a decade and billions of dollars building Digital Public Infrastructure that the world is now beginning to recognize as a genuine alternative to the closed-platform models exported by the United States and China. The July 2026 Modi–Prabowo summit represents the most significant test yet of whether that model can be transferred to a large, complex, and strategically important partner economy.Indonesia is not a passive recipient in this story. It is a sovereign democracy of 280 million people with its own digital ambitions, its own institutions, and its own geopolitical choices to make. The fact that it has chosen to orient its foundational digital infrastructure toward the Indian model — rather than adopting a Chinese or Western platform stack — is a strategic signal that deserves far more recognition in New Delhi than it has received.If the twentieth century connected nations through shipping lanes and trade routes, the twenty-first century will increasingly connect them through digital rails. For India, the opportunity in Indonesia is not simply diplomatic. It is the chance to demonstrate that open, inclusive, and sovereign Digital Public Infrastructure is not just a development tool but an exportable model — one capable of reshaping the economic architecture of the Indo-Pacific from the ground up.The bridge being built between Jakarta and New Delhi may not make tomorrow’s headlines. But its foundations, laid quietly in open protocols, payment integrations, and shared digital infrastructure, could prove among the most enduring strategic investments either country makes in this decade.(Sachin V. Gopalan is the founder of Indonesia Economic Forum. The views expressed are personal)