By drawing on Ottoman-Turkish documents in the Prime Minister's Ottoman Archives, this paper investigates the role of the Ottoman state and Pan-Islamic ideology on modernisation in Indonesia. The article revisits the process defining the Ethical Policy (Politik Etis) as the turning point of the emergence of modernisation in Indonesia. In existing scholarship, the 'Ethical Policy' became the grand narrative in Indonesian history, meanwhile the influence of PanIslamism is only seen as the unsuccessful political propaganda of Abdulhamid II on the anti-colonialism movement in Indonesia. Many Indonesian and Ottoman historians view Pan-Islamism in the context of anti-colonialism fighting against the Dutch militarily in the late nineteenth and early twentieth centuries. This article proposes an alternative view to this narrative which acknowledges Pan-Islamism as a modernisation step for Indonesians which was signed by the Jawi students arrival in Istanbul and shows the Hadhrami community as the agent of modernisation. In short, the article shows the Ottoman influence on the emergence of the Ethical Policy of 1901 in Indonesia.