TEMPO Interactive, Jakarta:Indonesia and India agreed to hold the Indonesia-India Comprehensive Economic Cooperation Agreement (IICECA), to discuss reducing tariffs and other aspects of free trade “Details of the negotiation will be discussed during our visit to India,” said Gusmardi Bustami, Director General of International Trade, in Jakarta yesterday.
Several topics to be discussed are tarif and non-tariff obstacles prevailing in both countries. There are several non-tariff obstacles in India, such as regulations on licenses, sanitary and phytosanitary for agricultural products.
According to Gusmardi, Indonesian products are often subject to very high tariffs of 35 to 40 percent. Meanwhile tariffs (of Indian products coming) to Indonesia is only 5-10 percent. The government intends to ask India to reduce its tariffs until a new agreement is reached.
This year trade balance between the two countries amount to US$ 6.53 billion. Exports to India last year totaled US$ 7.47 billion and it is expected to increase to US$ 9.01 billion this year. Meanwhile imports from India was US$ 2,09 billion and it is expected to increase to US$ 2.48 billion this year.
India is a very big market, but because of its protectionism, said Mintardjo Halim, a textile entrepreneur, its import duty is high. “Until now, it’s hard to export cars and textiles to India,” claimed Mintardjo.
Mintardjo said there was great potential for both countries to mutually benefit from such a cooperation. . Indonesia could get much in premium sectors such as cars and spare parts, coal and palm oil. Where the two countries clash, as in the textiles, he said free trade does not need to be applied..