Britain and Indonesia have set a £4bn maritime defence partnership after a call between Prime Minister Keir Starmer and President Prabowo Subianto on 22 November 2025. Downing Street cast it as the base for a longer-term tie, while Reuters reported Babcock will lead industrial delivery with ships to be built in Indonesia and UK content supporting domestic jobs.

The readout from No.10 said the leaders “celebrated” the new maritime partnership and agreed it would bring jobs, growth and opportunity to both countries. They also discussed deepening ties on education and economic growth, alongside regional security issues: Indonesia’s commitments to an International Stabilisation Force in Gaza and the push to tighten financial pressure on Russia by cutting energy revenue flows.

Industrial contours are already visible. Reuters says Babcock will steer the programme, with construction in Indonesia and around 1,000 UK jobs supported through design, systems integration and high‑value equipment. That blend of local build and British know‑how is consistent with recent UK defence export deals and should feed work into specialist suppliers across electronics, combat systems, software, test gear and training.

This isn’t starting from a cold engine. Babcock signed a design‑licence deal in 2021 enabling PT PAL in Surabaya to build two Arrowhead 140‑based frigates for the Indonesian Navy, and in August 2023 the keel for the first ship was laid. The new partnership reads as an expansion of that model: Indonesian yards scale up, while UK firms retain a slice of higher‑margin design and integration work.

For the UK workforce, the supply chain matters as much as the prime. House of Commons Library analysis, using ONS data, puts shipbuilding employment at about 38,650 jobs in 2023, heavily clustered in the North West and South West (both 34%) and Scotland (19%). When big naval orders land, the effect ripples through fabricators, marine engineers, software houses and apprenticeship schemes in those regions.

On scale, the £4bn headline is material against the UK’s recent export performance. Official statistics show the UK won £14.5bn of defence orders in 2023, the strongest year since 2013. Sea and integration work tend to be lumpy, but a single multi‑year maritime package of this size can reshape order books and revenue profiles for primes and SMEs alike.

It also outstrips the recent yearly baseline of UK‑Indonesia commerce. Department for Business and Trade data show total bilateral trade around £3.6bn in 2024 and again in 2023, with “ships” already among the top UK goods exported to Indonesia. A multi‑year naval programme could push that line item higher while deepening services exports in training and support.

Financing will be watched closely. In March, the government lifted UK Export Finance’s capacity for defence exports by £2bn to £10bn. Large programmes often blend buyer credit, commercial lending and export credit, so investors will look for clarity on any UKEF‑backed facilities once workshare and schedules are finalised.

For Jakarta, the logic is straightforward: a vast archipelago needs reliable hulls, sensors and support to police sea lanes and protect infrastructure. The UK government’s market guide notes Indonesia’s geography spans a distance wider than the continental United States, and independent analysis highlights a growing naval presence around the Natuna Sea. The partnership fits that long‑running requirement.

For UK readers, the practical cue is to watch for supplier briefings and early “long‑lead” orders. If Babcock proceeds as reported, expect demand signals for marine electronics, combat system integration, coatings, cables, HVAC, test equipment and training services through 2026. That’s where smaller firms typically convert headline geopolitics into purchase orders.

There is politics here too. The call touched on Gaza and Ukraine’s energy war, a reminder that industrial deals sit inside wider security choices. As ministers trail a “long‑term” defence partnership with Indonesia, the near‑term milestones to track are detailed announcements on build schedules, export licences, workforce training and any education tie‑ins the two leaders said they want to deepen.