India and Indonesia: China worries During his visit to India last year, President Barack Obama urged India to engage East and South-East Asian countries â€œto enhance security and prosperity of all our nationsâ€. Indians are doing exactly that: the chief guest at Indiaâ€™s 62nd Republic Day celebrations this week was Susilo Bambang Yudhoyono, the Indonesian president â€“ head of state of a formidable naval power that India views as a strategic partner. The Presidentâ€™s two-day visit culminated not only in an expansion of strategic military co-operation agreements but also in trade deals worth more than $15bn â€“ matching the agreements signed with other leaders who visited India last year. It is not the first time New Delhi has made such use of the Republic Day invitation : in 2009, Lee Myung-bak, South Koreaâ€™s president was chief guest at the ceremony, and shortly afterwards India started working on a free trade agreement with South Korea. The annual celebration is no longer a purely military display to show down the neighbouring rivals. Rather it has become a diplomatic exercise as the annual event coincides with trade deals alongside expanding defence agreements with like-minded neighbours. Indonesia is an important supplier of raw materials and fuel to India while big Indian conglomerates have invested in the countryâ€™s infrastructure, mining, IT and banks. This yearâ€™s celebrations coincided with Indian companies winning contracts to build airports, shipyards and coal-mines across Indonesia. GVK, the Indian infrastructure development firm, will construct airports in Java and Bali, while Adani, the energy group, will build a 270-km railway line and a coal terminal in Southern Sumatra. In the political realm, the two countries share lively domestic political scenes, recently acquired G-20 status, economic interests and above all, fears of a rising China. Indonesia has been keen on learning from the Indian defence sector, including training and hardware manufacturing. India hopes that co-operation with Indonesia will restrain growing Chinese presence in the Indian Ocean â€“ from the Bay of Bengal to the straits of Malacca. Likewise, Indiaâ€™s engagement with South Korea has involved a similar collaboration in defence manufacturing as well as investments crucial to both countriesâ€™ economic prosperity and regional security. Chinaâ€™s rise has led to a recalibration of regional politics, bringing together previously distant partners into alliances.