Representatives of the business and industry organizations of both countries updated President Joko Widodo and Indian Prime Minister Narendra Modi on the outcome of the Indonesia-India CEO Forum on Tuesday (May 29).
"We agreed to focus on four sectors to improve business partnerships from the previous six sectors," Chairman of Kadin Rosan Roeslani stated.
Roeslani explained that the CEO Forum is the second meeting after the first was held in 2016 and is a follow up of the strategic partnership between both countries.
Based on the International Trade Center's data, Indonesia was the second-largest coal exporter to India after Australia in 2016, while coal imports of HS2701, or coal, briquette, ovoid, and solid fuel made from coal, from Indonesia reached US$3.3 billion and rose to $4.7 billion in 2017.
India is a major export destination for Indonesia's coal. Taking into account India's growing needs of the domestic industry, Kadin expects Indonesia`s coal exports to increase.
"They also do not hesitate to invest in Indonesia in this sector," he noted.
Indonesia's pharmaceutical products are subject to quite high import tariffs of some 40 percent, leading to Indonesian drugs not being competitive for sale in India.
The high import tariff makes it possible for Indonesian businessmen to invest in India.
"However, the most important aspect is to find the right business partner, so this dialog is crucial to equate perceptions of the challenges that still exist," he stated.
In addition to producing recommendations in the form of key sectors for business partnerships, the countries` business organizations also signed a memorandum of understanding on cooperation to strengthen their relationship.
Vice Chairman of Kadin for the International Relations Division Shinta W Kamdani remarked that cooperation between the two organizations is essential to improve bilateral business and communication between the governments of both countries.
"In addition, with a 50:50 total trade and investment target of $50 billion by 2025, we must be able maximize all existing frameworks," she noted.
Kamdani remarked that the signed memorandum of understanding also agreed that the two organizations, which overshadow Indian and Indonesian entrepreneurs, will share information related to economic issues, trade, specific sectors comprising manufacturing, infrastructure, mining, and pharmaceutical, and provide support for various activities that can support ease of doing business to entrepreneurs from both countries.
Indonesia holds significance for the Indian economy, as it is the biggest trading partner in the Association of Southeast Asian Nations. India has become an export destination country for Indonesian palm oil and the second-largest coal importer for India.
With regard to investment, India is also important for Indonesia. India`s investments rose significantly in 2017, more than five folds from $55 million a year earlier to $286.6 million.
Based on data from the Central Bureau of Statistics, in 2017, the Indonesia-India trade balance increased 28.7 percent, with total exports of $14.08 billion and imports at $4.05 billion.
Trade balance between Indonesia and India during the period between January and March decreased by some 3.06 percent, reaching $4.33 billion in 2018 as compared to $4.46 billion in 2017.
Reporter: ANTARA
Editor: Ade P Marboen
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