RI-India to boost economic relationship

RI-India to boost economic relationship

Zakki P. Hakim, The Jakarta Post, Jakarta

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, Minister of Trade Mari E. Pangestu said on
Wednesday.

"Our exports to India account for only 1 percent of their
total imports of approximately US$200 billion," Mari said here
after leading a trade delegation visit to India from Aug. 8 to
Aug. 10.

The trade ministry's data shows that bilateral trade between
the two countries grew by approximately 20 percent last year to
$3.27 billion, 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,"
Mari 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 to investing in coal mines here, the minister added.

With the arrangement, Indonesia aims not only to increase
bilateral trade to $10 billion 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.