The governments of India and Indonesia will hold multiple high-level meetings from November 20-24 to finalise details to develop the infrastructure at Sabang Port in the archipelago’s Aceh province, multiple officials in the know told Moneycontrol.
A delegation including Indonesia's coordinating minister for maritime affairs and investment Luhut Binsar Pandjaitan and transportation minister Budi Karya Sumadi is expected to come to India to meet with senior officials from the Indian side, including minister of commerce and industry Piyush Goyal.
"Both countries are eager to move ahead with the development of the infrastructure at the Sabang Port. A joint feasibility study on the development of the port was created and submitted in May 2023. Discussions will now be held on how to finalise plans to develop the port," a senior government official said.
India and Indonesia are looking at opening up new routes to boost air connectivity between the two nations, including a proposal to connect Port Blair in the Andamans and Aceh, the westernmost province of Indonesia.
According to officials aware of the matter, the two governments estimate that an investment of Rs 6,500-7,500 crore will be needed to expand the infrastructure at Sabang.
"The Indonesian government was examining the feasibility study submitted in May for further approval and discussions on how investments will be made into the port are part of the agenda for the upcoming meetings," another senior official said.
New routes to boost air connectivity between the two nations are also expected to be discussed as part of the current round of meetings, the second official added.
Queries sent to the Ministry of Shipping and Ministry of Commerce remained unanswered at the time of publishing.
The Sabang port is located at the northernmost tip of Aceh province of Indonesia. It is situated approximately 710 kilometres from India's Andaman and Nicobar Islands.
Sabang is also just 500 kilometres from the Malacca Strait, one of the world’s busiest and most strategic shipping lanes.
The successful development of this vital deep sea port would allow India easier access to the Malacca Straits, a narrow stretch of the sea between Indonesia and Malaysia and one of six chokepoints along the world’s maritime trading routes.
It will also provide a strategic hedge at a time China is increasing its presence in the Strait of Malacca and the larger Indian Ocean.
The Malacca Strait serves as a vital link between the Andaman Sea, which forms part of the eastern Indian Ocean, and the South China Sea. Any route from the Pacific Ocean to the Indian Ocean requires passage through the Malacca Strait, as well as two other narrow passages, the Sunda and Lombok Straits.
This narrow passage handles a substantial share of the world's trade, accounting for 25-35 percent of global trade volume, with China relying on it for around 80 percent of its energy supplies.
During Prime Minister Narendra Modi’s 2018 visit to Indonesia, both sides decided to discuss boosting connectivity between the Andamans and Aceh.
It was also decided to set up a joint task force to undertake projects on port-related infrastructure in and around Sabang Island in Indonesia.
“India and Indonesia have started naval drills in 2017, but we can explore more. This will become even better when the Sabang seaport is established with India. Sabang Port has a depth of 40 metres which is good even for submarines,” Luhut had said in 2018.
However, the development of the port has encountered challenges. Despite Luhut’s 2018 statements, no concrete agreement has been signed, and progress has been slow. It took more than five years for just the completion of the joint feasibility study.
There is also the question of economic viability. India is also looking to invest in another port in the West Sumatra region of Indonesia.
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