India and Indonesia are poised to finalize a USD 450 million deal for the BrahMos missile system ahead of Indonesia’s President Prabowo Subianto’s visit to New Delhi as the chief guest for Republic Day celebrations on January 26. Sources reveal that India’s embassy in Jakarta has received a formal letter from Indonesia’s defense ministry regarding the agreement. If concluded, Indonesia would be the second foreign buyer of the BrahMos missile after the Philippines, which signed a USD 375 million contract in 2022 for the missile’s shore-based anti-ship variant. Discussions are also underway between India and Vietnam for a separate USD 700 million BrahMos missile deal.
As part of the negotiations, India has proposed a loan to Indonesia through the State Bank of India or other nationalized banks after talks with EXIM Bank fell through. The finalized specifics could pave the way for an announcement during Republic Day 2025. Indonesia’s recent inclusion in BRICS, effective January 6, 2024, enables transactions between the Indian Rupee and the Indonesian Rupiah, further facilitating the agreement. However, Indonesia’s President is also planning a bilateral visit to Pakistan, which Indian officials fear could jeopardize the BrahMos deal. Efforts are reportedly being made to dissuade him from combining his Republic Day visit to India with his trip to Islamabad.
The acquisition of the BrahMos missile system is expected to significantly bolster Indonesia’s coastal and maritime defense capabilities. Indonesia’s defense minister highlighted the potential for advanced technology collaboration, viewing the deal as an opportunity for growth and learning. Indian Navy Chief Admiral Dinesh Kumar Tripathi’s visit to Indonesia last month included discussions with Indonesian leaders on defense cooperation. Once inducted, the BrahMos missile will provide Indonesia with a strategic edge in securing its vast maritime borders.
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