Jakarta. India is seeking closer economic ties with Indonesia to help shield both countries from currency volatility and supply chain disruptions, according to its ambassador on Thursday.

Bilateral relations have gained fresh momentum following Indian Prime Minister Narendra Modi's three-day visit to Indonesia earlier this month. But despite the renewed engagement, trade and investment remain well below the potential of the two fast-growing economies, Indian Ambassador Sandeep Chakravorty said.

"If a large part of our economic output is related to each other, it will protect us from global turmoil, currency fluctuations, food shortages, and oil and fertilizer shocks," Chakravorty told the Jakarta Globe.

The two governments are working to deepen economic integration, including by reducing reliance on the US dollar in bilateral trade. Indonesia and India are in the "last stage" of linking their QR-based payment systems -- Indonesia's QRIS and India's UPI -- while their central banks are also developing a framework that would allow exporters and importers to settle transactions directly in rupiah or rupees. Both currencies have faced pressure against the dollar following recent tensions between the United States and Iran.

Chakravorty said these measures are essential in today's world of intensifying competition and disrupted supply chains, adding: “We need to do more with each other."

On investment, Chakravorty said the two countries had found ways to align their economic priorities. He also mentioned the "Self-Reliant India" strategy, which aims to strengthen domestic manufacturing while integrating Indian products into global supply chains, complementing Indonesia's drive to develop downstream industries.

One example is an agreement signed during Modi's visit between Steel Authority of India (SAIL) and Krakatau Steel to establish a stainless steel slab manufacturing facility in Indonesia.

"India is a growing market, and we can produce in Indonesia for global markets. That will create facilities, employment, and technology transfers," he said.

India is also exploring investments in Indonesia's fertilizer industry by leveraging the country's abundant natural gas resources. The products would serve both domestic demand and export markets, particularly as global fertilizer supplies remain vulnerable to geopolitical tensions.

Indonesia's trade with India rose nearly 4% year on year to $9.6 billion in the first five months of 2026. Indian investment in the country reached at least $105.5 million so far this year.