When Prime Minister Narendra Modi arrives in Jakarta in July, most Indians will see a familiar diplomatic milestone – another state visit, another set of agreements, another joint statement. Yet what is quietly taking shape in the Indonesian 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 than it currently gets in India. It is the world’s fourth most populous country, home to 280 million people, Southeast Asia’s largest economy and the third largest democracy on Earth. Its gross domestic product (GDP) has grown at about 5 percent annually over two decades, its middle class is projected to reach 140 million by 2030, and its digital economy is poised to reach United States dollars (USD) 194.5 billion in e-commerce alone. Indonesia sits on the world’s most important maritime trade routes, is a founding member of the Association of Southeast Asian Nations (ASEAN), and has strategic influence across the Indo-Pacific that India cannot ignore. And yet, for much of recent history, it has remained strangely peripheral to India’s public imagination.
This is now changing – and the reason is digital infrastructure.
Indonesia today is going through a period of strategic recalibration. As the country seeks greater economic sovereignty, it is simultaneously strengthening ties between multiple centers of global power. China remains the center of manufacturing and industrial investment. The United States and Western partners continue to play an important role in market access and geopolitical balance. Europe is becoming increasingly important for technology and critical minerals. Provides Middle East Sovereign Investment and Food Security Partnership. However, India is emerging as Indonesia’s partner of choice for digital public infrastructure – the foundational technology layer that will determine how 280 million Indonesians will access commerce, finance and government services in the coming decades.
This is not a small thing. This is arguably the most strategically important bilateral opening India has seen in the Indo-Pacific in a generation.
When President Prabowo Subianto visited India as the chief guest at the Republic Day celebrations in January 2025 – marking the 75th anniversary of diplomatic relations – the two governments raised digital cooperation as a central pillar of their relations. The joint statement recognized 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 the National Economic Council of Indonesia visited 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 implemented.
The most obvious result of this partnership is a project that Indians should keep a close eye on: the Indonesia Open Network, or ION. Directly inspired by India’s own Open Network for Digital Commerce (ONDC) and built on the Bakken 2.0 open protocol, ION is expected to conduct its first live transaction during the Modi-Prabovo summit on July 7.
ION is not a market. It is a neutral digital rail – connecting buyers, sellers, logistics providers, payment systems and financial institutions in a shared, interoperable ecosystem, based on the same open-protocol philosophy that underpins the India Stack.
The scale of the problem ION is designed to solve tells you everything about why it is important. Indonesia has more than 65 million micro, small and medium enterprises – the backbone of its economy. Yet many people are missing out on the full benefits of digital commerce. Platform commissions and fees often range between 25 to 40 percent of the transaction value, leaving small sellers, farmers and cooperatives out of the benefits of the digital economy. ION wants to reduce this to less than 8%.
As T. Koshy, former managing director of ONDC and now an advisor to Indonesia’s Digital Commerce Initiative, has consistently argued, “Open networks succeed because they democratize opportunity rather than cede it.” That principle, which was pioneered by India, is now being exported on a large scale for the first time to Southeast Asia’s largest economy. India’s Ambassador to Jakarta Sandeep Chakraborty recently said that “Open digital networks can give Indonesia the structural benefits it needs to achieve its 8 percent growth ambition – by expanding markets for millions of small businesses that remain productive but are geographically and digitally constrained.”
The second initiative with wider implications for Indian businesses and travelers is the proposed integration of the Unified Payment Interface (UPI) with Indonesia’s Quick Response Code Indonesian Standard (QRIS) payment system. QRIS is worth understanding for Indians. It is Indonesia’s national interoperable QR payment standard – launched in 2019 and now one of the most successful digital payment systems in emerging Asia. By the end of 2025, QRIS had reached 59 million users and 42 million merchants, and processed 13.66 billion transactions over the course of 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 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 every year, a live UPI-QRIS corridor will be transformative. Beyond convenience, it will lay the foundation for a bilateral digital trade corridor that has no real precedent in India’s regional relations. As leading Indonesian digital transformation expert Dr. Bayu Prawira Hi recently said, “Interoperability is no longer a technical issue; it is an economic leverage issue.”
A third area of cooperation may have even greater long-term significance. India’s Proteus e-Governance Technologies – one of the architects behind India’s own foundational DPI layers spanning digital identity, eKYC, e-signatures, tax modernisation, pensions and open digital commerce – is currently exploring opportunities to support Indonesia’s national DPI ambitions at the infrastructure level. Under the Digital Nusantara initiative, the National Economic Council of Indonesia plans to build an integrated, interoperable and scalable national digital infrastructure. The parallels with India’s own Digital India journey a decade ago are striking – and they create a real opportunity for Indian technology companies, not just as vendors, but as architects of a sovereign digital state.
Indonesia’s Ministry of Communications and Digital Affairs has clearly expressed its ambition to make Indonesia not just a consumer, but a producer and exporter of digital solutions throughout ASEAN.
“Indonesia’s long-term competitiveness depends on developing sovereign digital capabilities rather than importing platforms wholesale,” said Ilham Habibie, chief executive of the National ICT Council and president of the Indonesian Institute of Engineers. This is an aspiration that India intuitively understands – and this is where Indian expertise built through a decade of hard experience with Aadhaar, UPI, ONDC and DigiLocker is uniquely positioned to help.
The fourth initiative addresses Indonesia’s capital markets modernization agenda. Discussions are underway to involve Indian technology firms and institutions associated with the Bombay Stock Exchange ecosystem to explore AI-powered market monitoring, 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 business relevance in Jakarta today.
For Indian readers, the bigger picture is this: India has spent a decade and billions of dollars building a digital public infrastructure that the world is now recognizing as a real alternative to the closed-platform models exported by the United States and China. The July 2026 Modi-Prabovo summit represents the most important 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 preferences. The fact that it has chosen to orient its core digital infrastructure towards the Indian model rather than adopting a Chinese or Western platform stack – is a strategic signal that deserves far more recognition than it has received in New Delhi.
If the twentieth century connected countries through shipping lanes and trade routes, the twenty-first century will increasingly connect them through digital rail. For India, the opportunity in Indonesia is not merely diplomatic. This is a chance to demonstrate that open, inclusive and sovereign digital public infrastructure is not just a development tool, but an exportable model – 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 headlines tomorrow. But its foundation, quietly laid in open protocols, payments integration and shared digital infrastructure, could prove to be one of the most lasting strategic investments any country has made this decade.
(Sachin V. Gopalan is the founder of Indonesia Economic Forum. Views expressed are personal)
