Indonesia and Japan yesterday signed a defense cooperation agreement intended to advance collaboration in joint exercises and defense industrial development, opening the prospect of Indonesian purchases of Japanese military equipment.

The agreement was signed by Indonesian Defense Minister Sjafrie Sjamsoeddin and his Japanese counterpart Koizumi Shinjiro in Jakarta, with both hailing it as a milestone in bilateral relations.

“We ​have both agreed to promote substantive cooperation in ⁠the defense industry and development of our ​personnel, whilst taking into account our respective national interests,” ​Sjafrie said before the signing ceremony, according to Reuters.

Koizumi said that the two nations were “both maritime nations and share the same values,” adding that their cooperation will “contribute to defense and peace, not just in our countries, but the region as a whole.”

“Cooperation with Indonesia, which has significant influence and responsibility in terms of stability in its region, is growing all the more critical as international tensions rise,” he said, as per Nikkei Asia.

Koizumi added that the ministers also held a bilateral meeting ​where they discussed joint military exercises, ​further collaboration on ⁠maritime security, and military hardware and defense technology.

The text of the agreement has not been made public, with Koizumi stating in a post on X that “it’s frustrating that I can’t go into details.” However, the two ministers said the deal will see the tnations establish a framework for dialogue known as the Integrated Defense Dialogue Mechanism. This will institutionalize regular discussions between vice minister-level officials and military officers from both sides. Jakarta and Tokyo have also agreed to form a working-level group to enhance cooperation on possible defense equipment purchases.

The agreement comes not long after Japan’s government lifted its longstanding ban on the export of lethal arms, an important pillar of its postwar pacifist constitution. The change applies to five categories of defense equipment exports, which Japan will now be permitted to sell to countries with which it has defense equipment and technology transfer agreements.

This leaves Tokyo poised to become an increasingly active defense industry player in Southeast Asia, where a number of countries, particularly Indonesia and the Philippines, share its concerns about China’s growing maritime clout. Japan has explicitly stated that the resumption of arms sales is intended to support the defense of allies and other “like-minded” nations.

Indonesia is in many ways a logical customer for Japanese arms. Under President Prabowo Subianto, the country has been undertaking an ambitious program of military modernization, for which 337 trillion rupiah ($19.4 billion) has been earmarked in 2026. As part of this push, Prabowo’s administration has signed new defense agreements with Australia and the United States, while also seeking to upgrade its jet fighter force through deals with a number of countries.

However, in building out its military capability, Jakarta is keen to avoid an overreliance on any single power and has pursued a diversified military procurement strategy. While strengthening security relations with Western countries, it has also pursued closer ties with Russia and China; late last year, Indonesian officials even aired the possibility that it might purchase China’s J-10 jet fighter.

Japan’s status as perhaps the major “third player” in Southeast Asia after China and the United States will no doubt appeal to Indonesian officials keen to maintain their nation’s strategic autonomy.

The text of the agreement has not been made public, and it is not fully clear what Indonesia would wish to purchase from Japan, but it has previously shown interest in sourcing used Oyashio-class submarines from Japan’s Maritime Self-Defense Force. The new agreement ensures that it now has an additional option for modernizing the Indonesian armed forces.