The rapid advancement of artificial intelligence (AI) is reshaping global industries, creating new economic opportunities, and driving digital transformation. For nations in the Global South, AI represents both an opportunity and a challenge—an opportunity to leapfrog traditional industrialization barriers, but a challenge due to infrastructure, talent, and investment gaps.
AI can help these nations bypass traditional industrialization phases; for example, AI-powered agricultural solutions can boost productivity and reduce reliance on outdated farming practices (Case Study: AI-powered Agriculture in India and Indonesia). Additionally, a study by PwC predicts that AI could contribute up to $15.7 trillion to the global economy by 2030 (PwC Report: The Economic Impact of Artificial Intelligence, 2030), with Indonesia and India, due to their large populations and growing economies, standing to benefit significantly.
AI can also enhance public services like healthcare, education, and transportation. For instance, AI-powered diagnostic tools can improve healthcare access in remote areas (World Bank Report on AI Adoption in Emerging Markets). The recent AI cooperation agreement between Indonesia and India presents a unique opportunity for both countries to harness AI’s potential and develop regionally relevant solutions, setting a precedent for other emerging economies.
A Milestone in Bilateral AI Cooperation
On January 25, 2025, Indonesia and India signed a Memorandum of Understanding (MoU) on AI cooperation. This landmark agreement, witnessed by Indonesian President Prabowo Subianto and Indian Prime Minister Narendra Modi, signifies a commitment to leveraging AI for innovation, economic growth, and digital transformation. The partnership includes collaboration between Indonesia’s leading telecom company, Indosat Ooredoo Hutchison (IOH), and India’s AI firm AIonOS—a joint venture between InterGlobe and Assago Group—focused on AI-driven solutions in tourism, knowledge-based industries, and sustainable agriculture.
Strategic Objectives and Key Areas of Cooperation
The Indonesia-India AI partnership aims to:
Promote Innovation and Economic Growth: AI-driven solutions will enhance digital transformation in key industries such as finance, agriculture, and healthcare.
Enhance Competitiveness in the Digital Economy: Indonesia seeks to capitalize on India’s AI expertise to strengthen its position in the global AI ecosystem.
Foster Social and Cultural Transformation: AI will be integrated into education, public services, and governance to improve efficiency and inclusivity.
The cooperation is structured around four main pillars:
Talent Development: Training programs, academic exchanges, and AI skill-building initiatives.
Research & Innovation: Joint research projects to develop AI solutions for regional challenges.
Infrastructure & Digital Ecosystem: Strengthening AI infrastructure, cloud computing, and digital connectivity.
Regulation & Ethics: Establishing frameworks for responsible AI deployment.
Why This Partnership Matters for the Global South
The Global South, comprising emerging economies across Asia, Africa, and Latin America, faces unique challenges in AI adoption—ranging from digital infrastructure gaps to regulatory uncertainties. The Indonesia-India AI partnership provides a model for how developing nations can collaborate to:
Bridge the Digital Divide: By investing in AI capacity-building and digital literacy, this partnership helps mitigate technological disparities within and across countries. This issue is also a key concern for other developing nations, where digital inequality hampers economic progress and limits access to critical technologies. The Indonesia-India collaboration can serve as a replicable model for similar initiatives in regions like Africa and Latin America, addressing the structural challenges of digital transformation in emerging economies.
Encourage South-South Cooperation: This agreement highlights the potential of emerging economies to lead AI-driven transformation without relying heavily on Western technological dominance. This becomes even more relevant amid intensifying global competition, marked by the rise of AI ecosystems like Deep Seek and increasing semiconductor embargoes. By fostering a resilient AI infrastructure, Indonesia and India can mitigate risks associated with geopolitical dependencies and build a more self-reliant AI ecosystem.
Develop Contextually Relevant AI Solutions: Unlike Western AI models that often cater to high-income nations, the solutions developed under this partnership will be tailored to local socio-economic and cultural contexts. These solutions will focus on critical areas such as poverty alleviation, digital literacy, financial inclusion, and addressing other unique challenges faced by developing nations. By leveraging AI for microfinance, smart agriculture, and accessible education, Indonesia and India can ensure that AI adoption fosters inclusive and sustainable development across the Global South.
Boost AI Investment in Emerging Markets: The collaboration is expected to attract further AI investments from both the private and public sectors, fostering innovation in developing economies.
Challenges and the Road Ahead
Despite its potential, the partnership faces several challenges:
Digital Infrastructure Limitations: Indonesia and India must enhance AI-related infrastructure to ensure equitable access to AI technologies. Solutions include increasing investment in AI-ready cloud computing systems, expanding broadband internet access, and fostering public-private partnerships to develop AI-friendly digital ecosystems. Additionally, both countries can collaborate on cross-border data-sharing frameworks and digital security protocols to ensure sustainable AI growth.
Talent Shortage in AI: While India has a strong AI workforce, Indonesia needs to accelerate AI talent development through specialized education programs and industry collaborations. This includes fostering closer collaboration in curriculum development, joint research initiatives, and the establishment of vocational schools and online learning platforms to expand AI education accessibility.
Regulatory Harmonization: Both nations must align their AI governance frameworks to ensure ethical AI deployment and cross-border innovation. This governance model can serve as a blueprint for other developing nations and be promoted through multilateral collaborations in platforms such as BRICS or South-South cooperation initiatives.
Conclusion
The Indonesia-India AI cooperation marks a pivotal step toward empowering the Global South with AI-driven solutions. By fostering innovation, developing local talent, and creating a regulatory framework for responsible AI adoption, this partnership can serve as a blueprint for other emerging economies seeking to harness AI for sustainable development. As AI continues to redefine global competitiveness, South-South collaborations like this will be crucial in shaping a more inclusive and equitable digital future.
