India and Indonesia, the world’s most populous Muslim nation, on Monday decided to expand their defence and maritime security ties and resolved to deal with terrorism.

During the talks between Prime Minister Narendra Modi and Indonesian President Joko Widodo, the two countries, among the very few fast-growing large economies, also decided to boost trade and investment in the areas of oil and gas, renewable energy, information technology and pharmaceuticals.

The issue of South China Sea figured prominently. In a veiled message to Beijing, both sides said the dispute must be resolved through peaceful means.

Two memoranda of understanding were signed to provide for cooperation in youth affairs and sports and standardisation.

A joint communiqué on combating illegal and unregulated fishing was also firmed up.

In his statement, Mr. Modi said the talks focussed on the full range of cooperation and both countries agreed to prioritise defence and security cooperation and intensify efforts to ensure the safety and security of the sea lanes.

“As the world’s most populous Muslim nation, Indonesia stands for democracy, diversity, pluralism, and social harmony. These are also our values. Our nations and societies have nurtured strong bonds of commerce and culture throughout our history,” said Mr. Modii.

Asked whether India raised the issue of its national Gurdeep Singh facing the death sentence in Indonesia on drug charges, officials did not give a direct reply, but said the matter was under the judicial process in that country.

A joint statement said the two leaders condemned terrorism in all forms, saying there must be “zero tolerance” of acts of terror. It said all states must deal with transnational terrorism emanating from their territory through effective criminal justice response. “Both leaders discussed the threat from global terrorism and other transnational crimes and resolved to significantly enhance bilateral cooperation in combating terrorism, terror-financing, money-laundering, arms-smuggling, trafficking in human beings and cybercrime,” it said.

Mr. Modi and Mr. Widodo called upon all countries to implement the United Nations Security Council Resolution 1267 (banning militant groups and their leaders) and other resolutions designating terrorist entities. This is seen as an apparent reference to China blocking India’s move to get Jaish-e-Mohammed chief Masood Azhar designated as a global terrorist.

In what is seen as a message to Pakistan, the two leaders also asked all nations to work towards eliminating terrorist safe havens and infrastructure, disrupting terror networks and their financing channels and stopping cross-border terrorism.

Underscoring the need to improve connectivity and encourage people-to-people contacts, the two leaders welcomed the Indonesian airline Garuda starting direct flights from Jakarta to Mumbai.

Referring to the South China Sea dispute, in which Indonesia is a party, the two leaders called for resolving the issue through peaceful means and in accordance with the universally recognised principles of international law, including the United Nations Convention on the Law of the Sea (UNCLOS). “...they urged all parties to resolve disputes through peaceful means, without resorting to threat or use of force and exercise self-restraint in the conduct of activities, and avoid unilateral actions that raise tensions,” the statement said.

Both leaders reiterated support for reforms to the U.N. and its principal organs, including the Security Council, with a view to making the the global body more democratic, transparent and efficient.

On boosting defence ties, the two leaders wanted early convening of the Defence Ministers’ Dialogue and the Joint Defence Cooperation Committee (JDCC) meetings to upgrade the agreement on defence to a bilateral defence cooperation agreement. Pointing to the successful completion of the talks between the Staff of the Armies and Navies, they agreed to hold the Air Force Staff talks at an early date. “They also tasked the two defence ministers with exploring collaboration between defence industries for joint production of equipment with technology transfer, technical assistance, and capacity-building,” the statement said.