India and Indonesia have given fresh momentum to the Sabang port development project in northern Sumatra, with Indonesian President Prabowo Subianto welcoming Prime Minister Narendra Modi's interest in the port's integrated development during Modi's July 2025 visit to Jakarta. According to an analysis by the Australian Strategic Policy Institute (ASPI), the project holds significant promise as a commercial and bilateral corridor — but its strategic weight depends on it succeeding as an Indonesian-led initiative first.

Background and Bilateral Foundations

India's engagement with Sabang port dates to the 2018 'Shared Vision of India-Indonesia on Maritime Cooperation in the Indo-Pacific', which envisaged stronger connectivity between the Andaman and Nicobar Islands and Sumatra. That framework produced joint task forces, feasibility discussions, and proposals for a Sabang–Port Blair corridor, although most plans have yet to translate into commercial operations.

The July joint statement issued by India and Indonesia has now given the project greater substance, according to the ASPI report. It identifies cruise and marine tourism, ship repair, shipbuilding, and shore-based services for offshore energy activities as priority areas, and directs officials to clarify the project's scope, financing, and development phases.

What the ASPI Report Says

The ASPI analysis pushes back on the dominant framing of Sabang as a geopolitical counter-move. 'India's interest in developing Sabang port in northern Sumatra is often interpreted as a response to China's expanding maritime presence in the Indian Ocean. This does not capture India's more immediate priorities. Sabang will acquire strategic weight only if it first succeeds as a commercial, locally beneficial, Indonesian-led project. It is not an Indian base-in-waiting,' the report stated.

The analysis further notes that the agreement makes no provision for permanent operational access or a standing security presence, and that Indonesia's long-guarded sovereignty makes such an arrangement unlikely. 'India's objective is more modest and realistic — to improve maritime awareness, build logistical familiarity and deepen cooperation with regional partners in the eastern Indian Ocean. Sabang fits a strategy of presence through partnership rather than dominance through access,' the report stressed.

What It Means for India

For India, the report argues, Sabang is an opportunity to unlock the economic potential of the Andaman and Nicobar Islands — positioning them not merely as a security asset but as a platform for transhipment, tourism, and regional engagement, complementing the ongoing Great Nicobar Project. A Sabang–Port Blair corridor could support passenger and cargo services, repair contracts, offshore energy activity, skills exchanges, and greater movement of people and goods across the Andaman Sea.

What It Means for Indonesia

From Jakarta's perspective, a well-structured Sabang project could attract investment, technology, and employment to Aceh, strengthen maritime industries, and reinforce Indonesia's role as the gateway between the Indian and Pacific Oceans. The ASPI report emphasises, however, that the project must be visibly Indonesian-led, consistent with national regulations, and tied to local economic priorities — rather than presented as infrastructure that primarily serves another country's interests.

The Broader Strategic Picture

Notably, the ASPI analysis cautions against reading Sabang as India's answer to China's so-called 'String of Pearls' strategy. The report argues that such framing overstates India's intentions and risks complicating a project whose real value lies in commercial viability and regional trust-building. This comes amid a broader Indian push to deepen maritime partnerships across the Indo-Pacific through engagement rather than basing arrangements.

With officials now tasked with defining the project's scope and financing, the next phase of the Sabang port initiative will test whether the bilateral ambition outlined in July 2025 can be converted into operational reality.