Enhancing the Relationship
    Category: Issues & Ideas By : Aastha Saboo Read : 1399 Date : Sunday, July 10, 2016 - 20:55:52

    Ahmad Zamroni / Forbes Indonesia

    With a slew of announcements, the Jokowi government in the last year has sought to build a better economic relationship on the back of an already strong political one between India and Indonesia, two of Asia’s largest economies. With a mission to make these two countries “significant” business partners in the next few years, the new Indian ambassador to Indonesia is optimistic about achieving her goal. In one of her first interviews since her appointment earlier this year, Ambassador Nengcha Lhouvum Mukhopadhaya talked to Forbes Indonesia about how she would like to expand this key relationship.

    What are your top focus areas?

    Our focus area remains on trade and economics under which there is a whole realm of activity. With $20 billion worth of trade, we have a good base to start from; there is a great deal of comfort level already. Political relations and understanding is good. However, things that give more dynamism and energy to the relationship need to be improved. These are things that are tangible, in terms of output. A few sectors that were earlier closed to India are now beginning to open up. The meat sector is one. Rice is on the way. Pharmaceuticals have seen great interest at the leadership and people level. All these are things are directly affecting people. We have a very positive agenda, politically, economically and culturally. Indonesia is also interested in Indian smart city projects. We are both developing economies, so challenges and aspirations are similar.

    What will be the impact of some recent India friendly announcements? How will they affect the trade balance going forward?

    There is a desire at the highest level that Indian bovine meat is made available to the people of Indonesia during Ramadan. India is expected to get a significant share of the Indonesian meat market as our bovine meat is very competitively priced. So this will be a big positive for both the countries. The rice MOU being envisaged is to promote G2G mode of rice imports, as India wants to support Indonesia in overcoming the rice shortage due to drought. The MOU is expected to be signed very soon to facilitate import of up to one million tonnes of non-basmati rice per year for four years at a price to be negotiated by both sides every year. The meat ban revocation, and possible rice deal and drug import deal announcement will see a slight shift in the trade balance, with an estimated $2 billion increase of exports from India. These announcements are likely to increase trade by almost 10%, signaling a positive future.

    The drug import deal should open many opportunities. However, current laws and registration processes are hindrances to importation. How will this situation be addressed?

    The pharmaceuticals sector in Indonesia is highly regulated and protected. This not only hampers free trade but also flow of investment. Approval of finished product formulations could facilitate commencement of local manufacturing. The registration process also takes a long time. Both sides are aware of the opportunities in setting up of manufacturing plants for active pharmaceutical ingredients and medicines and medical devices in Indonesia, along with knowledge sharing on the integration of IT in the healthcare delivery system. As registration of drugs in Indonesia will be a long drawn process, both sides may identify WHO approved drugs as a prerequisite for import.