RI seeks more trade with India
RI seeks more trade with India
Agencies, New Delhi
Indonesian President Megawati Soekarnoputri called on Wednesday for more trade with India as the two countries signed a series of deals to boost economic ties.
Megawati, who arrived in India on Monday accompanied by a group of business executives, sought to lure investors to her country as her administration tries to ease internal political tensions.
New Delhi and Jakarta have shared friendly ties dating back to Indonesia's pre-independence days but annual bilateral trade stands at a meager US$1.5 billion.
"I am aware that a decision on whether or not to invest in Indonesia is largely based upon the consideration of political situation, public order, law enforcement and security stability," Megawati told a meeting of business and industry leaders.
"I must admit we still have to straighten and fix them up. Nowadays, the tension as the source of instability has increasingly diminished," she said. "We can see its signs and feel the situation is improving."
The Indonesian leader, who is ending a 13-day tour of Asian countries, came to power last year and political analysts say her cautious leadership has ushered in some welcome political stability. However, the country remains faced with an array of ethnic, religious and separatist woes.
Megawati said Indonesia was trying to overcome the southeast Asian financial crisis with its limited resources.
"Against such a limitation, we are trying to amend our investment policy," she said. "Our main objective is to open our door as wide as possible for capital to enter our country..."
Megawati listed railway transport construction, pharmacy, agriculture, education, healthcare and information technology as sectors in which India could share its expertise.
In return, Indonesia could provide agricultural products such as palm oil, wood products, fisheries, oil and gas.
Firms from both countries launched a bid to exploit that potential when they signed nine agreements spanning railways, pharmaceuticals, communications and information technology.
Among them was a deal under which Indian Railway Construction Co will build a railway line and port terminal worth $260 million in South Sumatra in exchange for coal, timber and crude oil.
The construction in Indonesia will be undertaken by the state- owned Indian Railway Construction Company (IRCON) and will be in exchange for coal, timber and crude oil.
India's Metals and Minerals Trading Corp (MMTC) also signed an agreement with the Indonesia Palm Oil Producer Association for a supply of palm crushing and oil mills in exchange for palm oil and other products.
"The value of palm crushing and oil mills to be supplied by India would be set off against purchase of palm oil and palm products or any other product to be identified for imports by MMTC," S.D. Kapoor, chairman of India's state-run trading firm MMTC Ltd, told Reuters.
Indonesia and Malaysia, the world's leading palm oil exporters, have been lobbying with India to boost the sale of palm oils.
But India's palm oil imports have fallen since New Delhi imposed a steep import duty of 75 percent on crude palm oil (CPO) and 85 percent on refined palm oil in its federal budget last February. The duties compare with 45 percent for crude soy oil and 50.8 percent on refined soy oil.
The two nations want New Delhi to create a level playing field by bringing palm oil duty on a par with soy oil but India has not made any commitment.
Palm oil made up 60 percent of India's total edible oil imports in 2000/01 (Nov-Oct), down from 68 percent a year earlier. During the same period soy oil imports rose to 31 percent from 15.3 percent.
On Thursday, Megawati will travel to the high-tech city of Hyderabad and Bombay, the country's financial capital before returning home on Friday morning.