Page 75 - ie2 August 2019

MARKETS

India-Indonesia bilateral trade

EEPC INDIA Table1: India-Indonesia bilateral trade ($ million)

2014-15 2015-16 2016-17 2017-18 2018-19 CAGR
NDONESIA has been a key econom-
ic partner for India in Southeast Asia India’s total exports to 4043.32 2819.49 3488.12 3963.77 5275.6 6.9%
Iwith the relationship between the two Indonesia
countries stretching back almost two
millennia. The two countries recently India’s total imports 15004.64 13131.93 13427.99 16438.8 15843.94 1.4%
from Indonesia
celebrated 70 years of bilateral relations.
Not just history; the two nations also Total trade 19047.96 15951.42 16916.11 20402.57 21119.54 2.6%
share contemporary issues. Both the na-
tions are plural; both have adopted liber-
alisation and have fast-spaced economies. BOT -10961.3 -10312.4 -9939.87 -12475 -10568.3
India regards Indonesia as a key ally in Source: www.commerce.nic.in
ASEAN. Further Indonesia is playing a
significant strategic role in helping India
enhance its association with the other cuses on India-Indonesia bilateral trade among the top 10 trading partners of
ASEAN countries. Both India and Indo- over the years – pre- and post-ASE- India during the last three years. The
nesia are member states of the G-20, the AN-India FTA (AIFTA) and suggest ways growth in exports from India to Indone-
E-7 countries, the Nonaligned Move- of narrowing the balance of trade. sia during 2018-19 vis-à-vis 2017-18 was
ment, and the United Nations. 33.1 percent while the growth in global
In recent times, both India and Indo- Indonesia’s economy in brief exports from India was 8.75 percent dur-
nesia have increasingly become more Indonesia has made remarkable progress ing the same. There has been negative
important in each other’s trade baskets. in its social and economic development growth in imports from Indonesia to
However, recently India has raised con- in the past few decades. Since the 1998 India (3.62 percent) but India’s global
cerns over the rising trade deficit with In- Asian financial crisis, its economy has imports have increased by 10.41 percent
donesia, which has reached $10.57 billion grown tenfold and per capita income during the period. The top items for
in the last concluding fiscal 2018-19. Our eightfold. which India recorded substantial trade
balance of trade is heavily in favour of Indonesia’s GDP growth rate in 2018 deficit in 2018-19 as against 2017-18 were
Indonesia and thus both countries need stood at 5.2 percent and ranked 6th mineral fuels, animal or vegetable fats
to work towards establishing sustainable among the 10 ASEAN nations (https: // and oils, ores, chemical products, rubber
trade by diversifying the export basket. www.adb.org/countries/indonesia/econ- and articles, inorganic chemicals, paper
On these lines, a meeting was held be- omy#tabs-0-0). and paperboard, wooden articles, pulp of
tween Prime Minister Narendra Modi Indonesia’s per capita GDP growth wood, and manmade fibres, etc.
and Indonesia’s President Joko Widodo is expected at 4 percent in 2019 and 4.1 India’s balance of trade, which is heav-
where the leaders discussed ways to deep- percent in 2020 as per the ADB (https: // ily in favour of Indonesia, has raised se-
en trade and enhance cooperation in a www.adb.org/countries/indonesia/econ- rious concerns and remedial measures
number of key areas including economy, omy#tabs-0-1). are sought. The Indian government feels
defence, and maritime security. During that there is considerable potential for
the meet, the two leaders pledged to dou- India-Indonesia bilateral trade expanding trade in the agricultural, auto-
ble their efforts to boost bilateral trade to Indonesia is the second-largest trading mobiles, engineering products, IT, phar-
$50 billion by 2025. partner of India among the ASEAN na- maceuticals, biotechnology, and health-
Given this background, this article fo- tions after Singapore. Indonesia ranked care sectors.

AUGUST 2019 l INDIAN ENGINEERING EXPORTS l 75