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Indian businesses set sights on Indonesia
Publication Date : 27-08-2013
An Indian business delegation comprising top executives from a dozen firms are on a visit to Indonesia to seek out fresh commerce and investment opportunities.
Federation of Indian Chambers of Commerce and Industry (FICCI) chairwoman Naina Lal Kidwai, who is leading the mission, said on Monday in Jakarta that with its vast domestic market, Indonesia provided Indian firms with as yet unexplored possibilities.
With more than 230 million people, Indonesia has always been perceived as the largest market in the region.
“We believe that the full potential for Indian companies in Indonesia has not yet been recognised,” said Kidwai, who is also the country head of HSBC India and director of HSBC Asia Pacific.
“Indonesia is well-known to some of our firms who are already present here, but even they can do more.”
The delegation comprises high-profile business executives from 24 medium and large-scale Indian firms, including Modi Enterprises; Indo Rama Synthetics (IRS) Limited;
Mahindra and Mahindra Ltd.; Tata Motors, and Newgen Software Technologies Ltd.
According to Kidwai, the firms were aiming to explore the myriad business opportunities in a wide array of sectors including energy; tourism; automotive; information technology (IT) and business process outsourcing (BPO); infrastructure; pharmaceuticals and health care; and consumer goods.
The scale of Indonesia’s domestic market, Kidwai said, offered characteristics similar to that of India, making it a potential manufacturing base for Indian firms to produce certain goods, such as consumer goods, and to act as a service base, such as for IT and BPO services, as well as a base for exporting to other countries.
India is a massive provider of IT services, accounting for around 58 per cent of global IT services, which allows the sector to generate 20 million direct and indirect employees in that country alone.
Indian investors already have a strong foothold in the archipelago in a number of sectors, including the automotive industry, banking, energy, food processing, infrastructure, mining, oil and gas and textiles.
Foreign direct investment (FDI) from Indian firms totaled US$78.1 million across 58 projects last year, while it reached $57.1 million in 59 projects from January to June this year.
Both countries have set a target to attain $25 billion in bilateral trade by 2015.
According to Central Statistics Agency, bilateral trade stood at $16.8 billion in the past year, down by almost 5 per cent from 2011. From January to May, it reached $7.56 billion, up by 5.9 per cent from a year earlier.
Kidwai said Indian businesses expected the governments of both countries to ink an economic partnership agreement to ease barriers to doing business and accelerate business processes, including the movement of businesspeople.
Pre-negotiation consultations on an Indonesia India Comprehensive Economic Cooperation Agreement (II-CECA) began a few years ago, but there have been no follow up meetings since the last consultation in late 2011.
Indian Ambassador to Indonesia Gurjit Singh said India hoped that talks would begin soon due to the importance of the agreement for both India and Indonesia.
“With Singapore, we already have a bilateral [comprehensive economic partnership agreement], while we have comprehensive free trade agreements (FTAs) with some other countries,” he said.
“With Indonesia, however, our structure is a bit weak. We want to strengthen that structure through an agreement because Indonesia today is a more important country for our investment and trade.”
Indonesia is currently negotiating a similar trade pact a regional comprehensive economic partnership with India, along with five other trading partners
Australia, China, Japan, New Zealand and South Korea.The Trade Ministry’s director general for international trade cooperation, Iman Pambagyo, declined to comment on whether the talks on the CECA would begin in the near future.