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Jul 11, 2026
Ramaharitha Pusarla

India's Maritime Arc Gains Momentum with Indonesia

Indonesia is India’s closest maritime neighbour, separated by 100 nautical miles. Trump administration’s decision to restore the old name of US Pacific Command, an attempt to de-emphasise the Indo-Pacific, is now emerging as a powerful regional binding force with PM Modi’s visit to Indonesia. Revoking the nomenclature adopted in 2017 while extracting the region from the superpower contestations has prompted the littorals in the region to align and recentre energies for inclusive growth and prosperity. PM Modi embarked on a three-nation visit to Indonesia, Australia and New Zealand on July 6th. Greeted with a historic welcome, with Indonesian Air Force F-16 and Sukhoi-30 fighter jets escorting Air India One after entering Indonesian airspace, upon his touchdown, PM Modi was accorded a gun salute. Warmly received by Indonesian President Prabowo Subianto and four Cabinet Ministers on the tarmac, PM Modi’s arrival in Jakarta was marked by unusual gestures of cordiality. The high notes of the diplomatic symphony, brimming with geniality, were witnessed in the grand ceremonial reception accorded to PM Modi at Istana Merdeka, the Presidential Palace. At the Official banquet, President Prabowo candidly admitted, “I follow your career, and I copy many of your programs. I don't mind admitting it because it succeeds for hundreds of millions of people with the same background as Indonesia”, and joked, “very happy that there is no copyright” on PM Modi’s program. The remarks, besides validating the governance initiatives of PM Modi, endorse the positive results of initiatives adopted from India. Indonesian delegation toured India to study agricultural innovations, and this open acknowledgement underscores growing policy cooperation between the countries. Displaying a rare camaraderie, President Prabowo accompanied PM Modi to the Indian Community reception, attended PM Modi’s address to the Joint Session of Parliament, and conferred on him the highest civilian award of Indonesia- Bintang Republik Indonesia Adipurna or Star of the Republic of Indonesia. President Prabowo’s invocation of “Indian DNA” claims, apart from his earlier revelations at the Presidential Banquet hosted by President Murmu on his India visit as Guest of Honour for the Republic Day celebrations in 2025, besides drawing smiles, highlighted the immense respect he holds for the cultural relationship with India. His special gesture of riding along with PM Modi for the launch of the India-assisted restoration of the Prambanan Temples, a display of deep mutual respect and appreciation for civilisational connections, earned the praise of millions of Indians. Built in the 9th century, the Prambanan Temple complex, the largest in Indonesia, is a magnificent Hindu architectural and engineering marvel. Dedicated to Trimurti- Bhagwan Shiva, Bhagwan Vishnu and Bhagwan Brahma- it stands as an enduring symbol of shared civilisational and cultural heritage. By spearheading the restoration of Hindu heritage centres across South East Asia, India is reclaiming its civilisational heritage. PM Modi’s visit to Indonesia, while setting a new benchmark in bonhomie and friendship, was compellingly significant in terms of bilateral outcomes. Besides reviving heritage beyond borders, the comprehensive and intensive discussions laid a strong foundation for a Free, Open, Inclusive Indo-Pacific. Sitting astride the crucial trade routes connecting the two oceans, Indonesia and India are the two most important maritime gatekeepers of the Indo-Pacific region. To beef up maritime security, countries have renewed a security cooperation arrangement between the Indian Coast Guard and BAKAMLA RI. Indonesia is also deploying a Liaison officer to the Information Fusion Centre- Indian Ocean Region (IFC-IOR). Indonesia’s security challenges are twofold. Given its location along the Sea Lines of Communication (SLOC), ensuring the safety of the waterways is both a matter of national security and an economic imperative. Additionally, the growing Chinese incursions into the North Natuna Sea are pushing the archipelago to the edge. Indonesia’s interest in enhancing engagements in traditional and emerging areas of defence cooperation stems from evolving security challenges. Along with the traditional aspects of cooperation- capacity building, information sharing, port calls and exchanges to strengthen maritime deterrence- Indonesia is purchasing India’s supersonic BrahMos missile system and indigenously built beyond-visual-range-air-to-air (BVRAAM) Astra Mk I missiles, a $630 million deal. Indonesia, which began talks on the BrahMos in 2021, fast-tracked the process after the missile’s performance during Operation Sindoor, becoming the third export customer after the Philippines and Vietnam. Interestingly, both BrahMos and Astra missiles can be integrated with Indonesia’s Air fleet comprising Su-27 and Su-30 fighter jets. Indonesia is the first foreign customer of the Astra missiles. This procurement validates India’s evolving defence manufacturing capabilities. This also marks a major milestone in India’s journey as a defence exporter and underscores how defence exports are becoming an instrument of foreign policy. While defence acquisitions would bolster security and provide deterrence for broader economic and strategic integration, countries agreed to jointly develop Sabang Port, which overlooks the strategic Malacca Straits. An estimated 75-80% of Chinese oil imports pass through the Strait. Developing Sabang will help India counter China’s growing influence and presence in the Indian Ocean Region. Lying at the northern tip of Sumatra Island, Sabang is 90 nautical miles from Indira Point, the southernmost point of the Andaman & Nicobar Islands, which is India’s tri-service command centre. India is also working on the mega Great Nicobar transhipment port. Sabang can complement Great Nicobar Port and augment India’s strategic presence in the Eastern Indian Ocean Region. This can greatly boost its Act East Policy in terms of connectivity, forward- deployment logistics, and maritime tourism by expanding trade and unlocking commercial opportunities with Indonesia and Southeast Asia. By integrating Sabang with the Bay of Bengal ports, countries are realising the 2018 shared vision on Maritime Cooperation for the Indo-Pacific. Overseeing the critical maritime corridors and chokepoints Sunda, Lombok, Makassar and Malacca, Indonesia is the ultimate gatekeeper of the Indo-Pacific. Through the Sabang collaborative project and the missile hardware, India has created a defence canopy and an impenetrable maritime domain over the eastern gateway to the Indian Ocean. Securing access to Sabang will give India’s operational requirements for refuelling and maritime patrolling a huge fillip. Sabang, a submarine base under the Imperial Japanese Navy, was where Netaji Subas Bose alighted after a daring sub-to-sub (from German to Japanese submarine) transfer off the coast of Madagascar to take charge of the Indian National Army (INA) in 1943. Beyond security and defence and maritime cooperation, the comprehensive strategic partnership between the countries spans four additional areas - economic and trade cooperation, health, pharma, food and energy security, people-to-people relations and civilisational connect. Synergising the developmental visions of both countries, Viksit Bharat 2047 and Indonesia Emas 2045, and seeking broader economic integration, the countries are now operationalising guidelines for trade in national currencies. Bilateral trade with Indonesia, India’s second-largest trading partner, has expanded from $4.3 billion to $38.34 billion in 2023-24. With a population of 288 million, Indonesia is the world’s fourth most populous country. The country holds Presidential, national, and regional elections on a single day. The arduous process of manual vote counting and exhaustion caused by it led to the death of over 500 election officials in 2019. In 2024 polls, despite government measures, close to 100 election volunteers died and over 4000 fell ill. The vital instruments of India’s robust election architecture, the EVMs, have set a new benchmark for being tamper-proof and accurate. Seeking to overhaul its voting system, Indonesia has signed an MoU for customising EVM technology, validating India’s voting system and putting to rest fraudulent allegations. Marking 100 years of Rabindranath Tagore’s visit to Indonesia, countries have designated 2026-27 as the Tagore-Dewantara Year of Cultural and Educational Diplomacy. India has announced plans to establish IIM Bangalore’s first overseas branch at Singhasari SEZ. Reliable supplies of critical minerals have become a strategic priority for countries given their indispensability for the clean energy missions, defence technology and semiconductors. Monopolisation, weaponisation and export restrictions have raised concerns over the reliability of supply chains. West Asian crisis exacerbated it further. In the past two years, India has signed pacts with 35 countries to secure their access. Indonesia has the world’s largest reserves of nickel, essential for the clean energy transition and a raw material for stainless steel. India has signed an MoU for the development of rare earth magnets. Simultaneously, India’s SAIL is exploring a JV with Indonesian PT Krakatau Steel for setting up a stainless-steel slab manufacturing facility in India. Countries have also signed MoUs on health collaboration, space exploration, medical products registration, disaster management, telecommunications technologies and sharing expertise for building an Open Network based on Open Network for Digital Commerce (ONDC). India pledged 100 tonnes of high-quality DWR 162 Wheat seeds as part of food security cooperation. Bilateral ties evolved into a robust Comprehensive Strategic Partnership during PM Modi’s visit in 2018. The trajectory of India-Indonesian ties, etched in brotherhood, as PM Modi recalled in his address to the Joint Session of the Parliament, has important geopolitical lessons. The shared struggle against imperial rule has been at the heart of the India-Indonesia brotherhood. India strongly supported Indonesian sovereignty. The reference to Odisha’s Biju Patnaik’s daring evacuation of Sukarno is a testament to the strong friendship between the countries. Sukarno was the Chief Guest for India’s first Republic Day celebrations in 1950. Leaders-PM Jawaharlal Nehru and President Sukarno championed Afro-Asian solidarity, anti-colonialism and non-alignment. Indonesia hosted the first Afro-Asian conference, a precursor to NAM, in Bandung in 1955. But the relations soured after Nehru refused to back Indonesia’s bid to hold the second edition of the conference. Driven by grandiose maritime ambitions, Sukarno began to side with Pakistan. In a sharp departure from a neutral stand on Kashmir, Sukarno sided with Pakistan. Indonesia even offered 5000 volunteers to Pakistan during the 1965 war with India and requested Sri Lanka (then Ceylon) to grant access to its airports. Sukarno reportedly lent a flotilla of six Russian-built frigates and two submarines to Pakistan. While China hasn’t entered the water, the Pakistan-China-Indonesia axis emerged as a major security threat for India during the war. Sukarno planned to seize the Andaman & Nicobar Islands (ANI) and declared his plans for the “Indonesian Ocean”. In the early 1960s, Indonesia considered ANI to be an extension of Sumatra. Sukarno harboured ambitious maritime plans and made some aggressive attempts to takeover Papau New Guinea, straining ties with Australia as well. Stretched for resources to defend the continental frontiers, India barely had any force to defend the ANI. Six decades hence, India, the resident power of the Indian Ocean, has steadily emerged as a security provider for the region. Working under the frameworks of the East Asia Summit (EAS), the Indo-Pacific Oceans’ Initiative (IPOI) and the Indian Ocean Rim Association (IORA) and guided by the Free and Open Indo-Pacific vision, India and Indonesia have deepened maritime security cooperation. Sabang Port development and plans for integration with the Great Nicobar Project and the Bay of Bengal ports are a huge leap forward in the strategic maritime partnership. As maritime nations straddling vital trade routes, India and Indonesia are increasingly positioned as natural security providers of the Indian Ocean region. Anchored in centuries-old civilisational ties and shaped by contemporary geopolitical imperatives, the strong personal chemistry between Prime Minister Narendra Modi and President Prabowo Subianto has transformed diplomatic goodwill into concrete strategic outcomes, strengthening the comprehensive strategic partnership and reinforcing a shared vision for a secure, prosperous Indo-Pacific. References https://www.mea.gov.in/bilateral-documents?dtl/41408/List_of_Outcomes_Prime_Ministers_visit_to_Indonesia_July_06__08_2026 https://www.mea.gov.in/bilateral-documents?dtl/41413/IndiaIndonesia_Joint_Statement_on_the_State_Visit_by_Prime_Minister_of_India_to_Indonesia_July_06__08_2026

Jul 10, 2026
Mukul Asher

Can Malaysia’s Scheme for Social Protection for the Self-employed, Gig Workers Be Considered Effective?

Malaysia, a country located in Southeast Asia, in 2026, is estimated to have a population of 34 million; a GDP in nominal terms of USD 516 billion; a per capita GDP in nominal terms of USD 15,000 and a share of 0.72 per cent in global GDP based on the PPP (Purchasing Power Parity) method 1. According to the World Bank, in 2025, Malaysia’s total labour force was 18.7 million, with an LFPR (Labour Force Participation Rate) of 71 per cent. Women and non-Malaysian workers constituted 37 per cent and 15 per cent of the total labour force, respectively 2. In the case of Malaysia, the World Bank defines informal sector workers as “… those in employment not covered by a pension, retirement savings (with EPF) or employment injury insurance (from SOCSO) … many of those who are covered by EPF and/or SOCSO may still experience some vulnerabilities in their work life, especially if their levels of contribution are low and their exposure to risks is high” 3. According to the World Bank, Malaysia has 4.1 million workers in the informal sector, accounting for roughly 27 per cent of the country's total workforce. This includes independent own-account workers, gig-economy participants, and unregistered business owners who lack standard social protections such as Employees Provident Fund (EPF) or SOCSO coverage. It is these 4.1 million workers that the recent social protection initiatives of Malaysia are aiming to cover. Malaysia’s EPF scheme, launched in 1951, is a defined contribution scheme for private sector and non-pensionable government sector workers. It is technically not a pension scheme, as members can, because of the political economy challenge facing the policymakers, withdraw all of the accumulated balances at age 55. The official estimates of life expectancy at age 55 in Malaysia are 21 years for men and 25 years for women. Thus, there is a long period when the EPF members have to manage retirement on their own from the full withdrawal of their balances. There are limited pre- 55 years of age provisions for housing, medical expenses, education and others. The standard mandatory contribution rate is 23 per cent, shared between the employer and employee, without any wage ceiling. The income tax exemption for contributions has a ceiling of RM 7000 per year. All dividends earned on EPF savings are fully income tax-exempt. All permitted withdrawals, including the final withdrawal, are also tax exempt. The absence of wage ceiling is likely to provide disproportionate income tax benefits to higher-wage earners. As of the end of 2025, assets of the EPF were RM 1.4 trillion (about 60 per cent of GDP). The median Employees Provident Fund (EPF) savings balance for members approaching retirement age (54 to 55) in Malaysia is approximately RM154,000, well below the EPF desired RM 240,000. This suggests a very skewed distribution of EPF balances. As of the end of 2025, EPF membership was 18.1 million, but active members were 10.6 million. The active members thus were about 58 per cent of the labour force, implying that around two-fifths of the workers, or about 8.7 million workers, are not covered by the EPF and therefore do not benefit from the prime national social protection scheme 4. Such a high proportion of inactive workers suggests a need to reform EPF’s database systems. The other major social security organisation in Malaysia is SOCSO (PERKESO). It administers a mandatory social security program established in 1971 under the Employees' Social Security Act 1969 to protect workers against workplace accidents, illnesses, and invalidity. All employers with at least one employee must register and contribute to the system, which covers Malaysian citizens, permanent residents, and foreign workers with valid permits. The contribution structure involves employers paying 1.75% and employees contributing 0.75% of monthly wages up to a ceiling of RM5,000, a total of 2.5% 5. Recently, the Malaysian government reversed the mandatory nature of the 24-hour Non-Employment Injury Scheme for local workers, making it voluntary. About 7 million workers (less than two-fifths of the labour force) are covered by SOCSO. Accumulated balances of SOSCO are around RM 32 billion, a non-significant amount. The 7 million workers of SOCSO include self-employed and gig workers registered under the Self -Employed Social Security Scheme (SESSS). The SESSS (LINDUNG KENDIRI) was introduced to protect individuals who are self-employed under the provisions of the Self-Employment Social Security Act 2017 6. Recent Initiatives for Self-employed and Gig workers in Malaysia In addition to the SESSS initiative noted above, there are two other initiatives taken by the Malaysian policymakers to expand social protection coverage to the self-employed and the gig workers. The first is the EPF-managed i-Saraan scheme, introduced in 2010. It is a voluntary program designed to help self-employed Malaysians, freelancers, and gig-economy workers build retirement savings while earning special government matching incentives. If a person contributes a total of RM2,500 in a calendar year, he/she will receive the maximum government incentive of RM500, or RM 5000 over the lifetime. Under the i-Saraan voluntary scheme, there is no fixed contribution rate. Any amount of contribution starting from a minimum of RM1 up to a maximum of RM100,000 per year is acceptable. Total cumulative historical data or an all-time lifetime sum is not officially tracked and published as a single metric by the EPF, a limitation which needs to be addressed urgently. Press report suggests that about USD 2.5 billion RM (about USD 0.6 billion) is the annual contribution. The amount collected is invested by the EPF in the same manner as its other funds. Being voluntary, the number of persons participating is relatively low, at most around 0.7 million. The coverage, therefore, may be termed inadequate at this point in time, though it could improve over time. This scheme is being extended to e-hailing/or p-hailing sectors. Platform providers under the e‑hailing and/or p‑hailing sectors must make i-Saraan Plus contributions on behalf of their workers through the employer. This is to enable the members to qualify for a special incentive of 20% (up to a maximum of RM600 per year) of the total voluntary contributions made in the current year. The second initiative is the Gig Workers ACT (GWA) The Gig Workers Act (GWA) was passed by the Parliament in September 2025 and enforced from April 2026. It is thus a new Act and overlaps with the other initiatives. Gig workers in Malaysia are estimated to be around two million. As it has only recently passed, data are not available. A recent study, however, assesses the GWA as follows. “The GWA’s mandate is for contracting entities to register gig workers in the Self-Employment Social Security Scheme (SESSS). It is a breakthrough for gig workers in ensuring they are insured for work-related injury. This should raise the participation of gig workers in the SESSS, which stood at only a quarter of overall gig workers in May 2025, with exceedingly lower rates in the arts sector. Nonetheless, some gaps have been highlighted, including possible exclusion of workers under foreign platforms and implementation challenges, such as duplicative SESSS membership for workers engaged with more than one platform. The omission of mandated participation in the EPF and Employment Insurance System (EIS) exposes gig workers to inadequate retirement savings and unemployment benefits. Their inclusion would face some hurdles; the EPF rests under the ministry’s jurisdiction (Finance), and unemployment can be difficult to define in the gig economy with fluid entry and exit. These social protection lacunae are the crucial gig worker issues to be addressed next, although it is also unclear which institution would oversee such policy deliberations” 8. The above analysis strongly suggests that the EPF and SOCSO, as currently organised and governed, have not been able to cover only a limited percentage of self-employed and gig workers. The initiatives of the Malaysian policymakers to include them in social protection schemes can be assessed as having very limited effectiveness. The following measures are suggested to enhance the effectiveness of social protection initiatives for the self-employed and the gig workers. First, organisational reforms of EPF and SOCSO merit serious consideration. The two organisations have the main mandate to provide benefits which are compulsory, not voluntary. The voluntary nature of recent initiatives in Malaysia, especially the SESSS, requires different structures in terms of databases and their integration; compliance and audit provisions; and the benefit delivery structures. Second, high-frequency, good-quality data needs to be collected regularly by the government to inform the progress of these initiatives and to make adjustments in the details of the scheme. Third, consideration should be given to integrating the recent initiatives at the Federal government level with the state-level initiatives to bring about greater coherence. Similarly, a system-wide perspective, rather than a standalone perspective of these initiatives, could be given consideration. Fourth, measures to enhance trust and confidence in the EPF and SOCSO, as well as in the overall governance structures of Malaysia, need to be undertaken in the current fragmented multi-polar world where many economic, trade, and social aspects have been weaponised, and this trend is expected to accelerate. References https://www.imf.org/external/datamapper/profile/MYS (Accessed on 7 July 2026) https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=MY (Accessed on 7 July 2026) https://documents1.worldbank.org/curated/en/099022124104067227/pdf/P18109313c28d408918ef910df6cdd46ce4.pdf (Accessed on 7 July 2026) https://www.kwsp.gov.my/en/w/news/epf-declares-6-15-dividend-for-simpanan-konvensional-and-6-15-for-simpanan-shariah (Accessed on 7 July 2026) https://www.omnihr.co/blog/socso-malaysia (Accessed on 6 July 2026) https://www.perkeso.gov.my/en/our-services/protection/self-employed.html (Accessed on 7 July 2026 https://www.iseas.edu.sg/articles-commentaries/iseas-perspective/2026-48-gig-workers-in-malaysia-is-the-new-law-a-good-deal-by-lee-hwok-aun/ (Accessed on 7 July 2026)