Jakarta, 18 December 2023 – Indian Ambassador to Indonesia and Timor Leste, Sandeep Chakravorty said that in the economic integration between Indonesia and India, reducing logistics costs is a challenge in trade between the two countries. In addition, there is also a need for direct connectivity between Indonesia and India so that export and import activities can run well.
This was conveyed by Sandeep at a business forum themed “Enabling Indonesia-India Economic Integration” organized by the Indonesia-India Business Forum (IIBF) together with the Indian Embassy in Indonesia and Investortrust, in Jakarta, Friday (15/12/2023). The business forum was also filled with discussions featuring Managing Director of PT Gateway Container Line Hesty Rosmawaty, Chief Operating Officer of PT Baramulti Suksessarana Tbk Kamlesh Kumar, and President Director of Asian Paints Indonesia Abhilasa Kannan, with moderator Founder of Indonesia Economic Forum Sachin V Gopalan.
Sandeep revealed that the governments of both countries have tried to overcome these logistical obstacles. For example, the high cost of logistics in India is overcome by the Gati Shakti master plan. The master plan initiated by Indian Prime Minister Narendra Modi is directed at building various sustainable infrastructure projects. On the other hand, the Indonesian government has also made great efforts to reduce costs in logistics.
Sandeep refers to receiving testimonials from businessmen about the high logistics costs of trading globally. “They (exporters) told me that it takes US$ 55 per ton to ship it from any port in India to Jakarta. But if they have to ship the same volume from Jakarta to Surabaya, it costs more than US$100. So there is a big challenge,” he said.
“But the cost of shipping a container from Mumbai to (New) Delhi is sometimes higher than shipping a similar container from Mumbai to Jakarta. So these are domestic challenges that are being addressed by both countries. But I think this is an opportunity to share. To share experiences. To know how we do that,” he added.
Sandeep said that one of the suggestions echoed was to push for a Preferential Trade Agreement (PTA) between India and Indonesia, so that there is a balance in trade. This is because India is the largest oil export destination for the Indonesian market.
“We will increase our economic integration. Trade agreements for Asian and Indian goods. One of the suggestions that came up was whether we need to have a PTA between India and Indonesia. At least in goods. We are trading more. But I think the discussion will accelerate when we have a balance in our trade,” he emphasized.
“Because we need coal. We need crude palm oil. And this provides the foundation and sustainability for our trade relationship. And we should look at these possibilities again,” Sandeep said.
Source: Investortrust
On the same occasion, IIBF Advisory Board, Bayu Prawira Hie also gave his views on the economic relationship between India and Indonesia. The two countries, which have a long historical relationship, need collaboration towards the sustainability of economic cooperation.
“By fostering strength in India and Indonesia, not only do we utilize each other’s strengths, but also create collective strength, which has the potential to encourage cooperation, increase strength, and improve people’s lives,” said Bayu.
Original article in Bahasa Indonesia can be accessed here