Indonesia, India to boost economic relationship
11 August 2005
Indonesia and India have agreed to set up a joint study group to boost the bilateral economic relationship which remained far from its huge potential, Indonesian Minister of Trade Mari Elka Pangestu has said.
"Our exports to India account for only 1 percent of their total imports of approximately 200 billion US dollars," Mari was quoted Thursday by The Jakarta Post newspaper as saying.
Mari just led a trade delegation to visit India from Aug. 8 to Aug. 10.
The trade ministry’s data show that bilateral trade between the two countries grew by approximately 20 percent last year to 3.27 billion dollars, with Indonesia’s exports making up 2.17 billion of that figure.
According to Mari, Indonesia’s small share in the Indian market was because the two countries had been relying too much on their traditionally traded commodities such as edible oil, petroleum- related products and textiles, while neglecting to develop other trade opportunities.
"We will continue to develop them (traditional commodities), but under the joint study group we expect to see them within a broader perspective of a mutually beneficial economic relation," she said.
She added that the study group would lead to the establishment of the so-called "comprehensive economic arrangement," and open the way, in the longer term, to eventually form a bilateral free trade agreement (FTA).
"Although it’s still far away, it could be said that the joint study group forms the first step of a very long journey to form an FTA," she said.
During her meeting with Indian Minister of Commerce Kamal Nath, the two discussed issues such as trade barriers for Indonesia’s CPO, cacao and coated paper.
Meanwhile, India requested export access for its certain meat products despite cases of foot and mouth disease in limited areas in the country.
India also would like to import more Indonesian coal and may consider investing in coal mines here, the minister added.
With the arrangement, Indonesia aims not only to increase bilateral trade to 10 billion dollars within five years, but also to boost tourist arrivals from India, which has a population of 1. 1 billion.
Indonesia currently hosts at least 30,000 Indian guests a year, as compared to 300,000 Indian who visit Malaysia each year, she said.