Prime Minister Narendra Modi began a six-day visit to Indonesia, Australia and New Zealand on 6 July. The tour will end on 11 July. Its main business is not ceremony but the next stage of India’s Act East policy.
The old Look East policy, launched in 1991, sought to connect India with ASEAN’s fast-growing economies. Act East added political visibility and connectivity. The present phase carries a sharper maritime and security edge. Trade remains on the table, but defence cooperation, critical minerals, clean energy, supply chains and sea-lane security now sit beside it.
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The Indo-Pacific carries a large share of global trade and output. It also contains the sea lanes through which India trades with East Asia. The United States and China now compete across this geography. India, Australia, Indonesia, Japan and several ASEAN states are trying to keep maritime routes open without being drawn into a single camp.
New Delhi has spent much of the past year on the western Indian Ocean, with visits and engagements in Mauritius and Seychelles. Modi’s present tour turns attention eastward, to Southeast Asia and the Pacific. For India, this is where trade dependence and maritime vulnerability meet.
Act East policy and the Malacca Strait
The Strait of Malacca is central to this tour. Much of India’s trade with East Asia passes through it. A disruption would raise shipping costs and hit energy, electronics, auto components and manufactured exports. Freedom of navigation is therefore not a slogan for India. It is a commercial necessity.
Indonesia sits across the Malacca, Sunda and Lombok straits. That gives Jakarta an importance few partners in the region can match. India’s ties with Indonesia were elevated to a Comprehensive Strategic Partnership during Modi’s 2018 visit. President Prabowo Subianto’s presence as chief guest at India’s Republic Day celebrations on 26 January 2025 showed the political investment on both sides.
The Sabang-Aceh-Andaman and Nicobar connectivity project remains unfinished business. A joint task force was set up after the 2018 visit, and meetings have discussed trade, port infrastructure, tourism, marine resources and connectivity between Aceh and the Andaman and Nicobar Islands. Progress has been slow. If revived, the project would improve India’s reach near the entrance to the Malacca Strait.
Defence is now part of the same conversation. Indonesia has entered into an agreement with India to procure BrahMos missiles. The Philippines deal made BrahMos India’s first major missile export. Indonesia would extend that export footprint into another maritime state with direct exposure to contested sea routes.
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India-Indonesia trade and its limits
Indonesia is India’s second-largest trading partner in ASEAN. Bilateral trade was $29.4 billion in 2023-24 and $28.15 billion in 2024-25. The balance favours Indonesia. India buys coal, crude palm oil, minerals, rubber, pulp and hydrocarbons from Indonesia, while exporting refined petroleum products, commercial vehicles, telecom equipment, agricultural goods, steel products and plastics.
The imbalance matters because India is already reviewing the ASEAN-India Trade in Goods Agreement with ASEAN members. India’s concern is familiar: market access has improved, but regional value-chain participation remains weak. Vietnam and Thailand have done better in plugging into export production networks. India’s trade policy has to move beyond tariff bargaining if Act East is to carry economic weight.
India-Australia critical minerals agenda
Australia is the strategic partner with the clearest resource logic. India and Australia work together in the Quad with the United States and Japan. Defence exercises, education, technology, mobility and supply chains have all expanded. But the larger economic opportunity lies in energy and minerals.
Australia has lithium, cobalt, nickel and rare earths. India needs them for electric vehicles, grid storage and renewable energy equipment. China still dominates critical mineral processing. Australia cannot solve that dependence by itself, but it gives India a resource base outside Chinese supply chains.
The India-Australia Economic Cooperation and Trade Agreement has already changed market access. Bilateral trade stood at $24.1 billion in 2024-25. From 1 January 2026, all Indian exports became eligible for zero-duty access into Australia. Negotiations for a broader trade pact continue.
The uranium question will be watched closely. Australia and India have had a civil nuclear framework for years, but commercial supply has not matched the strategic promise. If this visit advances a supply pact, it would support India’s nuclear fuel security at a time when electricity demand and decarbonisation pressures are both rising.
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India-New Zealand FTA and Pacific outreach
The New Zealand leg is smaller in trade value but important in diplomatic signalling. This is the first state visit by an Indian Prime Minister to New Zealand in four decades. It follows Prime Minister Christopher Luxon’s India visit in March 2025 and the signing of the India-New Zealand Free Trade Agreement on 27 April 2026.
The FTA gives Indian exports duty-free access to New Zealand. New Zealand gains tariff cuts or elimination across most of its exports to India, though India has protected sensitive farm interests. Bilateral trade is modest compared with India’s exchanges with Indonesia or Australia. New Zealand’s official estimate puts two-way trade at NZ$3.95 billion annually. The room for growth is therefore real.
Education, mobility and the Indian diaspora add weight to the relationship. New Zealand has a sizeable Indian community and a growing number of Indian students. These links cannot substitute for trade depth, but they give the relationship a constituency beyond government.
India’s Indo-Pacific diplomacy is now more visible. It is in the Quad, runs more naval exercises, sells missiles, works with island states and speaks the language of maritime security. Visibility, however, is only the starting point. The harder task is converting visits, joint statements and defence talks into ports, supply chains, mineral processing, trade access and industrial capability.