Posted on November 9, 2026
JAKARTA – The Indian government is still consistent in offering an investment of around US$ 104 million to develop the Sabang Port, Aceh, into a regional transhipment hub. The cooperation offer has been submitted to the Indonesian government since 2018, but until now it has not been realized.
The Head of the Free Trade Area and Free Port of Sabang (BPKS) Management Agency, Iskandar Zulkarnaen, said India had proposed five times to cooperate in the development of the Sabang Port in various high-level bilateral meetings, including a meeting between the President of Indonesia and Indian Prime Minister Narendra Modi.
“Since 2018 until the last meeting yesterday, India has asked five times for Sabang Port to be a port that is cooperated with them,” said Iskandar in a Focus Group Discussion (FGD) Media in Sabang, Aceh, quoted Friday, November 6, 2026.
He explained that in 2021, consultants from India had conducted a study to calculate the investment needs for the development of Sabang Port as a regional transhipment center that supports Indian trade activities.
The study, which was completed in 2023, estimates that investment needs reach around 104 million US dollars.
In the proposal submitted to the Indonesian government through the Ministry of Foreign Affairs and the Ministry of National Development Planning/Bappenas, India offered a financing scheme with an investment share of 80 to 85 percent. Meanwhile, Indonesia is expected to bear around 15 to 20 percent of the total investment needs.
However, Iskandar said that the development plan has not been realized. BPKS is still encouraging the central government to determine the direction of the development of Sabang Port through national policies.
According to him, since the early 2000s, Sabang has been designed as a free trade area that has a strategic position in international shipping routes. One of the main concepts of its development is to make Sabang a transhipment center, namely a location for transferring cargo from one ship to another before being distributed to various destination ports.
To support this plan, the government has built a container terminal facility in the CT3 area with an area of approximately 12 hectares, including an open yard area.
However, after the construction lasted for several decades, the function of the Sabang Port as a transhipment center has not run according to the initial concept.
“This port that has been built so magnificently must have a national agenda. What do you want to do,” he said.
Sabang Targets Andaman Oil and Gas Logistics Opportunities
In the midst of the non-realization of the transhipment concept, BPKS also sees the opportunity to use Sabang Port to support oil and gas exploration activities (migas) in the Andaman region.
Iskandar said that oil and gas activities in the region have the potential to require port facilities as a logistics base. This opportunity can be utilized through the development of a number of supporting facilities, given that some of the basic infrastructure of Sabang Port is already available.
Some facilities that still need to be added include open yards and warehouses. Currently, Sabang has a warehouse of around 4,000 square meters, while the expected needs reach 10,000 square meters.
With the addition of these facilities, it is expected that Sabang Port will begin to build a logistics service ecosystem to support oil and gas exploration activities in the Andaman region.
Encourage Cruise Ship Tourism
Apart from the energy sector, BPKS also encourages the development of cruise tourism as one of the sources of economic growth in the region.
Iskandar said that cruise ships visiting Sabang have the potential to bring thousands of tourists. This condition opens up economic opportunities for tourism business actors and local communities.
“The cruise ship is quite large. There are those who have up to 2,000 passengers. Imagine if 2,000 can all get off,” he said.
Assuming a tour package worth around 100 US dollars per person for an eight-hour visit, the potential value of the transaction could reach 200,000 US dollars if all passengers follow the tour package.
To support the development of the area, BPKS is also discussing with Bappenas about alternative financing outside the government budget. One of the options being explored is the use of foreign loans or grants, including through exploring cooperation with the Asian Development Bank (ADB).
Photo caption: From left to right, Head of the Communication Department Group of Bank Indonesia Anton Pitono, Head of BPKS Iskandar Zulkarnaen, and Head of the Aceh Provincial Representative Office of Bank Indonesia Agus Chusaini.
