India to hold an exhibition here next year

JAKARTA (JP): India plans to hold an exhibition at the Jakarta Fairground next March to forge stronger economic ties with Indonesia.

Indian Ambassador to Indonesia S.T. Devare told The Jakarta Post yesterday that the exhibition, which will involve at least 67 Indian companies, is expected to inform Indonesians about the business and trade opportunities India offers.

He said the current economic relations between India and Indonesia are not yet equal to the potential, adding that annual two-way trade stands at only US$650 million.

"There seems to be a lack of communication between us. I don't mean to say that we don't know anything about each other. We seem to know each other but we have not yet deeply explored our potential," Devare said.

Although India and Indonesia are both developing countries and share common interests and similar problems, they have many complementary aspects which need to be fully explored, he added.

He said Indonesia has many natural resources, such as rubber, coal, tin, palm oil, crude oil and natural gas, while India has engineering goods, capital goods, chemicals, feed stocks and power generation equipment, most of whom Indonesia still imports.

To coincide with the expo, the joint business council between the two countries' chambers of commerce and industry will hold seminars on investment opportunities in both countries.

The ambassador said the Indian companies will bring their products and services to the exhibition and invite their Indonesian counterparts to establish closer business contact with them.

"Indonesian businessmen are warmly welcomed in India and we are repeatedly requesting them to go to India to participate in various specialized trade fairs because India, as you know, is a large market," Devare said.

Indian businesses began investing here more than 20 years ago. However, there are only about 20 Indian joint ventures in Indonesia, ranging from the textile industry to machine tool production.

The ambassador said Indonesian businesses investing in India at present could benefit from the country's new economic liberalization.

Foreign investment in India has so far been marginal, Devare said. During the last four-and-a-half years, foreign investment has not yet exceeded $5 billion.

"Of course, the potential for investment are there, and the Indian stock exchanges, which are among the oldest in Asia, are going well in attracting portfolio investment," Devare said.

He explained that India has vigorously pursued economic liberalization since mid-1991, when the country started stripping all monopolistic rights from state enterprises and allowing the private sector, including foreign investors, to enter almost all sectors.

He said that India is now able to feed its 923 million people, and that the country is increasingly becoming an exporter of basic commodities, such as rice and sugar.

Economic growth, which was stagnant for many years, has picked up during the last four years, reaching 5.3 percent last year. This year, the Indian economy is expected to grow by nearly 6 percent.

Inflation has been kept at single digits, some 8.5 percent per annum. The government is aiming to bring the inflation rate down to between 5 percent and 6 percent in coming years.

Devare said India's economic reforms have the full support of country's 26 states, many of which have recently been competing with one another to attract foreign investment.

"Consensus on economic reforms and the liberalization is now very much there," Devare said, adding that the reform process will continue no matter which political party controls the country. (rid)