Key Points:
- The Sri Lanka-Indonesia relationship continues to value non-alignment, sovereignty and multilateral engagement in an environment of intense geopolitical rivalry.
- Underpinned by historical and strategic commonalities, both Sri Lanka and Indonesia seek to form closer diplomatic, economic and security links.
- Indonesia’s support for Sri Lanka is framed within its longstanding ‘free and active’ foreign policy, which is a calibrated policy framework, rather than strategic or alliance-based support.
- Sri Lanka’s support towards Indonesia has been normative and diplomatic, and is rooted in a shared Global South identity, non-alignment and multilateral cooperation, rather than a formal strategic alliance.
The rapidly evolving geopolitical landscape of the Indo-Pacific region provides a timely and compelling rationale for re-examining Sri Lanka-Indonesia relations. In the contemporary era, the Indo-Pacific has emerged as a focal point for global strategic competition, maritime security concerns and competing visions for the region. Major powers have intensified their engagement across the Indian and Pacific Oceans, reshaping traditional security alignments and institutional dynamics.
Within this increasingly contested environment, maritime states such as Sri Lanka and Indonesia occupy geostrategic positions of considerable importance. Sri Lanka sits at the heart of the Indian Ocean’s critical sea lanes, while Indonesia straddles vital maritime chokepoints linking the Pacific and Indian Oceans. In this strategic context, I will examine the historical background and evolution of the relationship between the two countries, with particular emphasis on their political, diplomatic, economic and trade relations.
The relationship between Sri Lanka and Indonesia is historically rooted in a shared postcolonial trajectory shaped by Portuguese and Dutch rule, as well as the traditional influence of Buddhism. That connection was later strengthened by such Global South diplomatic movements as South-South cooperation, with Sri Lanka being among the first countries to recognise independent Indonesia, in 1949. Sri Lanka played an active role in supporting Indonesia’s diplomatic initiatives during its quest for sovereignty, notably by hosting the 1954 Colombo Powers Conference.
Indonesia was also one of the first countries to establish formal diplomatic relations with the newly independent Sri Lanka in 1952. Soon after, both countries actively participated in the landmark Bandung Conference, which laid the foundation for Afro-Asian solidarity and, eventually, to the non-aligned movement. More recently, the swift humanitarian assistance offered by Indonesia to Sri Lanka during its devastating economic crisis in 2022 stands as testimony to the enduring goodwill and long-term tangible solidarity between the two states.
Socio-Demographic Context
As the largest economy in South-East Asia and the fourth-most-populous state in the world, Indonesia aspires to become a developed nation by 2045. The country recently became the eleventh member of BRICS and is actively seeking membership of the OECD (Organisation for Economic Co-operation and Development) to reflect its global stature.
Located astride critical maritime routes that connect the Pacific and Indian Oceans, Indonesia has pursued a ‘free and active’ foreign policy, emphasising strategic autonomy, non-alignment and multilateral engagement. Thus, as the largest member of ASEAN, Indonesia plays a significant role in shaping regional diplomacy, particularly through South-South cooperation. In the Indo-Pacific security landscape, Indonesia positions itself as a middle power advocating inclusivity, maritime cooperation and regional stability, while carefully balancing its relations with major powers.
On the other hand, Sri Lanka is a small island state located in the central Indian Ocean, strategically positioned above major east-west maritime trade routes connecting Asia, the Middle East and Europe. Hence, it attracts attention from major powers seeking to secure sea lanes, expand strategic influence and consolidate their presence in the broader Indo-Pacific region.
Since independence, Sri Lanka’s foreign policy has also been grounded in non-alignment, sovereignty and multilateral engagement. In that vein, the current political and economic priorities of Sri Lanka have evolved from its striving post-colonial values, being significantly reshaped by the tumultuous and protracted three-decades-long civil war and the recent economic crisis of 2022. Succeeding governments have prioritised addressing the challenges posed by those circumstances through domestic and foreign policies. These include, inter alia, post-war reconciliation, managing economic stability while balancing rising external debt and inflation, and restoring the declining public trust in state institutions.
In the aftermath of the civil war, successive administrations focused on post war reconstruction and rehabilitation in the conflict-affected areas of the country, while engaging with international actors such as the United Nations, particularly on issues related to human rights, accountability, and reconciliation. At the same time, Sri Lanka increasingly relied on foreign partnerships for development assistance, particularly from China, for the infrastructure development of the country, hoping it will be the foundation for long-term economic growth.
Following the unprecedented economic crisis of 2022, however, government priorities shifted further towards economic stabilisation through debt restructuring, fiscal reforms and negotiations with the International Monetary Fund (IMF), attracting foreign investment, and restoring diplomatic relations with both traditional and emerging partners. These developments have reinforced Sri Lanka’s pragmatic foreign policy approach, compelling the country to balance its long-standing non-aligned principles with the realities of geopolitical competition and economic dependency in the Indian Ocean region.
Political and Diplomatic Engagement
Since the establishment of formal diplomatic relations in 1955, Sri Lanka and Indonesia have shared cordial bilateral relations strengthened by high-level state visits and cooperation in multilateral fora, including the United Nations, the Indian Ocean Rim Association (IORA), the Group of 77 and the ASEAN Regional Forum (ARF). Both countries continue to support each other in multilateral and regional institutions.
Indonesia’s support for Sri Lanka is framed within its longstanding ‘free and active’ foreign policy, a strategically balanced framework that enables Indonesia to maintain its diplomatic independence while actively engaging the country with regional and global affairs. On the other hand, Sri Lanka’s support towards Indonesia has been normative and diplomatic, and is rooted in a shared Global South identity, non alignment and multilateral cooperation, rather than a formal strategic alliance.
In brief, the mutual support exhibited by both countries in international fora signifies a shared diplomatic goodwill and alignment on sovereignty-based foreign policy principles, rather than a pre-existing institutionalised alliance based on economic, political or security related agreements. While the embassies in Colombo and Jakarta solidify the relationship, periodic consultations between foreign ministries provides ongoing diplomatic continuity.
Notable examples of their partnership include Indonesia’s backing of Sri Lanka’s accession to the ASEAN Regional Forum in 2007 and Indonesia’s continuous support for Sri Lanka at the UN Human Rights Council when it was presented with resolutions against Sri Lanka concerning reconciliation, accountability and human rights during post-civil war reconstruction.
Reciprocally, Sri Lanka has always welcomed and supported Indonesia’s leadership initiatives, particularly in maritime cooperation and blue economy-related discussions in IORA. Sri Lanka has publicly embraced Indonesia’s leadership during its G20 presidency, and pledged its support for Indonesia’s chairmanship and initiatives in the ASEAN Regional Forum.
Over the years, both countries have successfully sustained the dialogue through formal mechanisms designed to promote sectors such as trade, investment, cultural exchange and political consultation. During the most recent high-level Indonesian state visit to Sri Lanka, under the premiership of President Joko Widodo, in 2018, the two countries’ leaders exchanged views on the ‘progress and challenges’ faced by both parties in bilateral cooperation and agreed to bolster cooperation for their mutual benefit.
The discussions, centred on identifying paths forward across several priority areas, including maritime connectivity and security, expanded economic cooperation, trade and tourism, and enhanced defence collaboration, particularly in terms of military training and efforts to combat illicit drug trafficking. The visit also resulted in the signing of three MoUs targeting strengthened cooperation in search and rescue, higher education, research and technology, and joint efforts to counter trafficking in narcotic drugs and psychotropic substances, and their chemical precursors.1
Economic Cooperation and Trade Engagement
Trade relations between Sri Lanka and Indonesia have never been uniform, with an erratic balance of trade that has always favoured Indonesia. According to recent statistics released by Sri Lanka Customs, in 2024, total imports from Indonesia totalled US$444.29m while exports amounted to only US$45.74m, leaving Sri Lanka with a trade deficit of US$398.55m. Sri Lanka’s main exports to Indonesia include apparel, rubber and paper products; notable imports from Indonesia include coal and fertilisers. 2
Sri Lanka and Indonesia entered into a bilateral economic and technical cooperation agreement (ETC) in June 1996 and, in October 2007, a Joint Commission was established under that ETC to enhance economic cooperation between both countries. Furthering those initiatives, a Working Group on Trade and Investment (WGTI) was established during its second meeting, held in October 2014, with the purpose of exploring and enhancing further trade and economic opportunities.
In the aftermath of the COVID-19 pandemic, both countries recognised the importance of consolidating and deepening their economic relations as a central pillar of bilateral engagement. During the sidelines of the 77 th session of the UN General Assembly, Sri Lanka expressed its interest in elevating bilateral trade through concrete measures, including the early convening of the third Joint Commission for Bilateral Cooperation (JCBC), which had been postponed due to the pandemic.
During recent bilateral meetings, Sri Lankan authorities have emphasised the importance of creating an investor-friendly environment for Indonesian investors, and have invited them to participate in such sectors as pharmaceuticals, construction, textiles, and maritime-related infrastructure, including opportunities in the Colombo Port City and elsewhere. For both countries, further boosting their investments in seaborne trade and maritime infrastructure will serve to benefit both their own citizens and, more broadly, the Indo-Pacific region.
Untapped Potential
These contemporary political, diplomatic, trade and economic discussions underscore the Sri Lanka-Indonesia relationship as being a historically grounded, yet strategically underdeveloped, partnership. It is one which persists based on historical understandings, mutual diplomatic support and economic connections that reflect strategic autonomy.
In the evolving Indo-Pacific security environment, it can be assumed that both countries’ viewpoints converge on principles of inclusivity, sovereignty and maritime cooperation. With the intensification of major power competition across the Indian Ocean and South-East Asia, there remains untapped potential for Sri Lanka and Indonesia to translate this normative alignment into more substantive collaboration. Given Sri Lanka’s geographic and economic connections to the Indian Ocean region and Indonesia’s pivotal role in ASEAN, their collaboration has the potential to serve as a conduit for enhancing ASEAN’s relations with South Asia. It is a partnership that has the capacity to facilitate comprehensive cooperation across the diplomatic, economic and security domains, which could ultimately prove beneficial for all parties in the region.
ANALYSIS & COMMENTARY
Bridging The Indian Ocean And ASEAN: Dynamics Of Sri Lanka-Indonesia Relations
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President Joko Widodo’s visit to Sri Lanka was historic as the first visit of an Indonesian president to Sri Lanka for 39 years. It also commemorated 66 years of diplomatic relations between the two countries and saw President Widodo hosted for discussions by President Maithripala Sirisena. Source: Embassy of Democratic Socialist Republic of Sri Lanka in Jakarta, 2024, https://srilankaembassyjakarta.com/sri-lanka-indonesia-historic-moments/.
Key Points:
The rapidly evolving geopolitical landscape of the Indo-Pacific region provides a timely and compelling rationale for re-examining Sri Lanka-Indonesia relations. In the contemporary era, the Indo-Pacific has emerged as a focal point for global strategic competition, maritime security concerns and competing visions for the region. Major powers have intensified their engagement across the Indian and Pacific Oceans, reshaping traditional security alignments and institutional dynamics.
Within this increasingly contested environment, maritime states such as Sri Lanka and Indonesia occupy geostrategic positions of considerable importance. Sri Lanka sits at the heart of the Indian Ocean’s critical sea lanes, while Indonesia straddles vital maritime chokepoints linking the Pacific and Indian Oceans. In this strategic context, I will examine the historical background and evolution of the relationship between the two countries, with particular emphasis on their political, diplomatic, economic and trade relations.
The relationship between Sri Lanka and Indonesia is historically rooted in a shared postcolonial trajectory shaped by Portuguese and Dutch rule, as well as the traditional influence of Buddhism. That connection was later strengthened by such Global South diplomatic movements as South-South cooperation, with Sri Lanka being among the first countries to recognise independent Indonesia, in 1949. Sri Lanka played an active role in supporting Indonesia’s diplomatic initiatives during its quest for sovereignty, notably by hosting the 1954 Colombo Powers Conference.
Indonesia was also one of the first countries to establish formal diplomatic relations with the newly independent Sri Lanka in 1952. Soon after, both countries actively participated in the landmark Bandung Conference, which laid the foundation for Afro-Asian solidarity and, eventually, to the non-aligned movement. More recently, the swift humanitarian assistance offered by Indonesia to Sri Lanka during its devastating economic crisis in 2022 stands as testimony to the enduring goodwill and long-term tangible solidarity between the two states.
Socio-Demographic Context
As the largest economy in South-East Asia and the fourth-most-populous state in the world, Indonesia aspires to become a developed nation by 2045. The country recently became the eleventh member of BRICS and is actively seeking membership of the OECD (Organisation for Economic Co-operation and Development) to reflect its global stature.
Located astride critical maritime routes that connect the Pacific and Indian Oceans, Indonesia has pursued a ‘free and active’ foreign policy, emphasising strategic autonomy, non-alignment and multilateral engagement. Thus, as the largest member of ASEAN, Indonesia plays a significant role in shaping regional diplomacy, particularly through South-South cooperation. In the Indo-Pacific security landscape, Indonesia positions itself as a middle power advocating inclusivity, maritime cooperation and regional stability, while carefully balancing its relations with major powers.
On the other hand, Sri Lanka is a small island state located in the central Indian Ocean, strategically positioned above major east-west maritime trade routes connecting Asia, the Middle East and Europe. Hence, it attracts attention from major powers seeking to secure sea lanes, expand strategic influence and consolidate their presence in the broader Indo-Pacific region.
Since independence, Sri Lanka’s foreign policy has also been grounded in non-alignment, sovereignty and multilateral engagement. In that vein, the current political and economic priorities of Sri Lanka have evolved from its striving post-colonial values, being significantly reshaped by the tumultuous and protracted three-decades-long civil war and the recent economic crisis of 2022. Succeeding governments have prioritised addressing the challenges posed by those circumstances through domestic and foreign policies. These include, inter alia, post-war reconciliation, managing economic stability while balancing rising external debt and inflation, and restoring the declining public trust in state institutions.
In the aftermath of the civil war, successive administrations focused on post war reconstruction and rehabilitation in the conflict-affected areas of the country, while engaging with international actors such as the United Nations, particularly on issues related to human rights, accountability, and reconciliation. At the same time, Sri Lanka increasingly relied on foreign partnerships for development assistance, particularly from China, for the infrastructure development of the country, hoping it will be the foundation for long-term economic growth.
Following the unprecedented economic crisis of 2022, however, government priorities shifted further towards economic stabilisation through debt restructuring, fiscal reforms and negotiations with the International Monetary Fund (IMF), attracting foreign investment, and restoring diplomatic relations with both traditional and emerging partners. These developments have reinforced Sri Lanka’s pragmatic foreign policy approach, compelling the country to balance its long-standing non-aligned principles with the realities of geopolitical competition and economic dependency in the Indian Ocean region.
Political and Diplomatic Engagement
Since the establishment of formal diplomatic relations in 1955, Sri Lanka and Indonesia have shared cordial bilateral relations strengthened by high-level state visits and cooperation in multilateral fora, including the United Nations, the Indian Ocean Rim Association (IORA), the Group of 77 and the ASEAN Regional Forum (ARF). Both countries continue to support each other in multilateral and regional institutions.
Indonesia’s support for Sri Lanka is framed within its longstanding ‘free and active’ foreign policy, a strategically balanced framework that enables Indonesia to maintain its diplomatic independence while actively engaging the country with regional and global affairs. On the other hand, Sri Lanka’s support towards Indonesia has been normative and diplomatic, and is rooted in a shared Global South identity, non alignment and multilateral cooperation, rather than a formal strategic alliance.
In brief, the mutual support exhibited by both countries in international fora signifies a shared diplomatic goodwill and alignment on sovereignty-based foreign policy principles, rather than a pre-existing institutionalised alliance based on economic, political or security related agreements. While the embassies in Colombo and Jakarta solidify the relationship, periodic consultations between foreign ministries provides ongoing diplomatic continuity.
Notable examples of their partnership include Indonesia’s backing of Sri Lanka’s accession to the ASEAN Regional Forum in 2007 and Indonesia’s continuous support for Sri Lanka at the UN Human Rights Council when it was presented with resolutions against Sri Lanka concerning reconciliation, accountability and human rights during post-civil war reconstruction.
Reciprocally, Sri Lanka has always welcomed and supported Indonesia’s leadership initiatives, particularly in maritime cooperation and blue economy-related discussions in IORA. Sri Lanka has publicly embraced Indonesia’s leadership during its G20 presidency, and pledged its support for Indonesia’s chairmanship and initiatives in the ASEAN Regional Forum.
Over the years, both countries have successfully sustained the dialogue through formal mechanisms designed to promote sectors such as trade, investment, cultural exchange and political consultation. During the most recent high-level Indonesian state visit to Sri Lanka, under the premiership of President Joko Widodo, in 2018, the two countries’ leaders exchanged views on the ‘progress and challenges’ faced by both parties in bilateral cooperation and agreed to bolster cooperation for their mutual benefit.
The discussions, centred on identifying paths forward across several priority areas, including maritime connectivity and security, expanded economic cooperation, trade and tourism, and enhanced defence collaboration, particularly in terms of military training and efforts to combat illicit drug trafficking. The visit also resulted in the signing of three MoUs targeting strengthened cooperation in search and rescue, higher education, research and technology, and joint efforts to counter trafficking in narcotic drugs and psychotropic substances, and their chemical precursors.1
Economic Cooperation and Trade Engagement
Trade relations between Sri Lanka and Indonesia have never been uniform, with an erratic balance of trade that has always favoured Indonesia. According to recent statistics released by Sri Lanka Customs, in 2024, total imports from Indonesia totalled US$444.29m while exports amounted to only US$45.74m, leaving Sri Lanka with a trade deficit of US$398.55m. Sri Lanka’s main exports to Indonesia include apparel, rubber and paper products; notable imports from Indonesia include coal and fertilisers. 2
Sri Lanka and Indonesia entered into a bilateral economic and technical cooperation agreement (ETC) in June 1996 and, in October 2007, a Joint Commission was established under that ETC to enhance economic cooperation between both countries. Furthering those initiatives, a Working Group on Trade and Investment (WGTI) was established during its second meeting, held in October 2014, with the purpose of exploring and enhancing further trade and economic opportunities.
In the aftermath of the COVID-19 pandemic, both countries recognised the importance of consolidating and deepening their economic relations as a central pillar of bilateral engagement. During the sidelines of the 77 th session of the UN General Assembly, Sri Lanka expressed its interest in elevating bilateral trade through concrete measures, including the early convening of the third Joint Commission for Bilateral Cooperation (JCBC), which had been postponed due to the pandemic.
During recent bilateral meetings, Sri Lankan authorities have emphasised the importance of creating an investor-friendly environment for Indonesian investors, and have invited them to participate in such sectors as pharmaceuticals, construction, textiles, and maritime-related infrastructure, including opportunities in the Colombo Port City and elsewhere. For both countries, further boosting their investments in seaborne trade and maritime infrastructure will serve to benefit both their own citizens and, more broadly, the Indo-Pacific region.
Untapped Potential
These contemporary political, diplomatic, trade and economic discussions underscore the Sri Lanka-Indonesia relationship as being a historically grounded, yet strategically underdeveloped, partnership. It is one which persists based on historical understandings, mutual diplomatic support and economic connections that reflect strategic autonomy.
In the evolving Indo-Pacific security environment, it can be assumed that both countries’ viewpoints converge on principles of inclusivity, sovereignty and maritime cooperation. With the intensification of major power competition across the Indian Ocean and South-East Asia, there remains untapped potential for Sri Lanka and Indonesia to translate this normative alignment into more substantive collaboration. Given Sri Lanka’s geographic and economic connections to the Indian Ocean region and Indonesia’s pivotal role in ASEAN, their collaboration has the potential to serve as a conduit for enhancing ASEAN’s relations with South Asia. It is a partnership that has the capacity to facilitate comprehensive cooperation across the diplomatic, economic and security domains, which could ultimately prove beneficial for all parties in the region.
1 Source: Joint Press Statement between Sri Lanka and Indonesia on the occasion of the State Visit of H.E. Joko Widodo, President of the Republic of Indonesia to Sri Lanka (Embassy of Sri Lanka in Jakarta, 2018).
https://srilankaembassyjakarta.com/2018/01/25/joint-press-statement-between-sri-lanka-and-indonesia-on-the-occasion-of-the-state-visit-of-h-e-joko-widodo/
2 Source: The Observatory of Economic Complexity. https://oec.world/en/profile/bilateral-country/idn/partner/lka
About the Author:
Chair - National and International Linkages, HYIERI Australia
Jayathry Gunaratne is a researcher and writer with a PhD in International Studies from Ewha Womans University, Seoul, South Korea. Currently based in Perth, her research interests include global affairs, migration policy, regional development, and cross-cultural studies with a focus on the Asia-Pacific region.