Jakarta prioritizing domestic defense industry
Gusty Da Costa
Amid growing regional tensions and evolving battlefield technology, Indonesia is seeking to further strengthen its domestic defense industry.
While already boasting a successful record of domestic production for national defense needs as well as export, the industry is set to benefit from a growing defense budget, new strategic partnerships and technology agreements with other countries, as well as industry reforms.
Indonesian President Prabowo Subianto, who took office in October 2024 after five years as the nation’s defense minister, has made defense a key focus. During his presidential campaign, he pledged to raise Indonesia’s defense budget to 1.5% of gross domestic product by 2029, effectively doubling current spending.
In November 2024, Prabowo ratified laws on defense cooperation with Brazil, Cambodia, France, India and the United Arab Emirates. As defense minister, he signed similar agreements with Australia, Germany and the United States.
Priorities include developing fighter aircraft, submarines and military satellites, according to Septiawan, executive director of the Indonesia Defense and Security Strategic Forum, who uses one name.
Analysts note the importance of the domestic defense industry in the country’s national security posture. “Superior products such as aircraft, patrol boats and medium light weapons automatically give growth to the level of confidence in the international arena and in economic growth as well,” Dr. Yono Reksoprodjo, head of technology transfer and offset at the Defense Industry Policy Committee, which reports to Indonesia’s Defense Ministry, told FORUM.
The CN-235, a medium-range, twin-engine aircraft developed by Indonesia’s PTDI and Spain’s CASA, highlights the domestic defense industry’s capabilities, Septiawan told FORUM. “This tactical transport aircraft meets domestic needs and is exported to multiple countries, showcasing the competitiveness of Indonesia’s aerospace industry internationally.”
PTDI modified and upgraded the CN-235 into a maritime patrol aircraft variant with advanced avionics and integrated digital displays, he added.
Indonesian shipbuilder PT PAL is partnering with France’s Naval Group to build two Scorpène Evolved submarines in Indonesia for the country’s Navy. In January 2025, Indonesia and Japan agreed to resume negotiations on joint development of naval frigates based on Japan’s Mogami-class design. Jakarta also might collaborate with New Delhi on defense technology, with a focus on India’s BrahMos cruise missile, The Defense Post website reported in December 2024.
Indonesia and South Korea are working on the KF-21 Boramae fighter jet project, Beni Sukadis, an analyst at the Indonesian Institute of Defense and Strategic Studies, told FORUM. “Meanwhile, South Korean company LIG will cooperate with PTDI and private Indonesian companies … to develop rockets and drones,” he said.
Jakarta also launched Defend ID, a consortium of strategic companies, according to Septiawan. “This initiative aims to improve synergy, efficiency and innovation in defense product development, and strengthen Indonesia’s position in the global defense industry,” he said.
Septiawan outlined likely priorities for the country’s defense industry, including increasing use of domestically made components, fostering “institutional synergy” among government, industry and the Armed Forces, and strengthening technology transfer through strategic foreign partnerships.
“I think Indonesia’s defense industry has great potential [to improve] the capability and independence of the state’s defense,” Sukadis added.
Gusty Da Costa is a FORUM contributor based in Jakarta, Indonesia.
