Thu, 10 Mar 2005

Indonesia, India hope for improved trade, investment

The Jakarta Post, Jakarta

Indonesia and India are exploring the possibility of improving investment and trade relations in the coming years, says Minister of Trade Mari E. Pangestu.

"We are looking into the possibility of improving investment and trade relations under the plan to establish the Association of Southeast Asian Nations (ASEAN)-India Free Trade Area (FTA)," she said after opening a four-day Indian engineering expo -- Indiatech 2005 -- at the Jakarta Convention Center on Wednesday.

Members of ASEAN have agreed to start implementing a planned FTA with economic powerhouse India this year.

Under the plan, tariffs on 105 products will be gradually cut under an early harvest program (EHP) with the prospect of zero tariffs by 2007. The products involved include unprocessed agriculture products, chemicals and manufactured products.

Mari, who also oversees the Investment Coordinating Board (BKPM), said that Indonesia and India had the potential to increase their bilateral investment and trade as they were highly complimentary to each other.

India, for example, was strong in engineering and information technology, while Indonesia was strong in agro-industry, she said.

In order to promote trade and investment, Indonesia sent a delegation led by Minister of Foreign Affairs Hassan Wirayuda to India late last month and would send a group of information technology experts to the country in May.

According to the BKPM, Indian investment plans approved by the agency steadily increased from US$5.4 million in 2002 to $7.1 million in 2003 and $66.7 million in 2004.

Meanwhile, two-way trade between the two countries increased from $1.94 billion in 2002 to $2.4 billion in 2003, and reached $2.91 billion during the first 11 months of 2004, according to the trade ministry.

Chairman of the Engineering Export Promotion Council (EEPC) of India, Rakesh Shah, said India had been a major investor in the Indonesian manufacturing sector, particularly in synthetic fibers, textiles, garments, steel and hand tools.

"Overall, Indian investors hold around $1.5 billion in assets in Indonesia with annual output of between $1 billion and $1.5 billion," he said.

The expo was participated in by 100 engineering companies from India, mostly small and medium enterprises. The EEPC expects that the event will showcase technological advancements made by those companies, particularly in compressed natural gas (CNG) use on public transportation, which has helped New Delhi becoming cleaner.

The biennial expo, which is regularly staged by the EECP in different countries, will be open to the public from 10 a.m. to 8 p.m. (003/004)

Investment -- Page 13