Jakarta. India hopes to explore the largely untapped economic potentials in its relationship with Indonesia by making direct investments without a third country channel, an envoy said on Tuesday.
The two countries have been intensifying bilateral relationships since a visit by President Joko “Jokowi” Widodo in December 2016 and again during the ASEAN-India Summit in January 2018, followed by Prime Minister Narendra Modi’s arrival in Jakarta in May 2018.
Both countries have set an ambitious target of boosting bilateral trade volume to $50 billion a year, but then the Covid-19 pandemic struck.
“However, the potential between our two countries is hard to miss. A lot of things have happened [since Modi’s visit]. To note a few things, our bilateral trade reached a figure of nearly $20 billion in 2019 just before the Covid,” Manoj Kumar Bharti, the Indian ambassador to Indonesia, said during the launch ceremony of a book celebrating the Indonesia-India relationship in Jakarta.
“Now if you see investment -- the Indian investment in the last 20 years has been nearly $1.5 billion, but the investment which actually is from India but is routed from Singapore is about $54 billion,” he said.
Manoj added the bilateral trade has been largely in Indonesia’s favor in recent years.
He didn’t go into details but reiterated that both countries must do something “to balance these things” and to bypass Singapore when it comes to investments.
“The question here arises: what can we do to make these investments directly from India to Indonesia and not routed through Singapore?” he said.
India and Indonesia also need to boost confidence in each other’s capabilities to allow bigger trade and investment, said Manoj, who began to lead the Indian mission in Indonesia in January.
Following the exchange of visits by both leaders, Indonesian and Indian businesses need to “build on what we have done already and to capture the spirit of the last four years”, he said.
“Things have started to happen. The GMR has received the government of Indonesia’s nod to make a world-class airport in Medan,” Manoj said, referring to Indian-based airport developer GMR Group.
State-run airport operator Angkasa Pura said earlier the government planned to upgrade the Kualanamu International Airport near the North Sumatra capital of Medan into an integrated business hub that has hotels, a convention hall, a golf course, a retail center, a hospital, and a theme park, occupying a space of 135 hectares.
The so-called Airport City will connect logistical, commercial, and industrial zones in three neighboring cities including Medan, Belawan, and Tanjung Morawa.
“This is a wonderful beginning, this is a wonderful sign of increasing confidence of the government of Indonesia in the Indian capabilities. We need to build on this,” Manoj said.
India also offers huge quantities of meat at “a much reasonable price” than what Indonesia gets from Australia and cheaper rice than what Indonesia buys from Thailand, he added.