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‘Indonesian Investors not aware of the opportunities present in AP’

Adi Singh

Visakhapatnam: The Indonesian economy has over the past 15 years grown stronger & vibrant and as per economic and social indicators, Indonesia now ranked 16th in the world plays a more active and dominant role in the international and regional arena.
In order to expedite the process of sustainable economic growth the Indonesian government in recent years has developed and implemented a Master-plan to transform Indonesia into one of the 10 major economies in the world by the year 2025.
‘Foreign investors are welcome to choose their desired sectors and preferred regions according to their business interest’ says Mr. Hariyanta Soetarto, Consul (Economics/Head of Chancery), Consulate general of the Republic of Indonesia.
In an interview to ViS, the Consul elaborates on the bilateral trade relations between the two countries and the reason for his visit to Vizag. Below are edited excerpts of the interview.

How has the bilateral trade between the two countries developed?
Bilateral trade between India and Indonesia has significantly improved over the years. To give you actual figures the bilateral trade in the year 2004 was US $4.5 billion and this increased to US$ 16.99 billion in 2013. The target we have set for 2015 is US$ 45 billion.
Implementation of the ASEAN-India free trade agreement (AIFTA) has contributed a lot to this increase in trade. I must point out that 16 MoU’s were signed between India and Indonesia in 2011in sectors ranging from aerospace, science, to IT. There are currently 7 Indonesian companies operating in India in sectors like food processing, Agri-seeds, logistic cargo services, placement services etc.

What are some of the key industries in Indonesia?
Some of the crucial sectors for our economy are Mining, Steel and Palm oil. We are the second largest producer of palm oil in the world. Also in agriculture cocoa is a stronghold, wherein we are the third largest producer of Cocoa in the world. Most of this cocoa is exported to North America and Europe.

How have Indian investments into Indonesia fared? And what are some of the potential sectors for investments?
Indian investment in Indonesia has continuously increased in various sectors such as Textiles, metal, automotive, machinery, coal and electronics. Some of the famous Indian names include Tata, Reliance, Bajaj and TVS.
To name a few potential sectors for investments it would include energy, food, infrastructure, mining, automobile, power, manufacturing, agriculture, textile and IT.

Are there any incentives that the government of Indonesia provides to foreign investors?
Sure. In order to make the investment law more investor friendly the government of Indonesia in August 2013 announced a slew of economic policy packages aimed at increasing investment.
Apart from this there is OSS i.e. one stop shop for investment clearance. OSS organizes complete licensing and non-licensing procedure of investment in a single office that has the authority from related technical institutions or ministries to issue the licensing and non-licensing documents on particular sectors. The objective of OSS is dedicated to provide easy, fast, precise, accurate, transparent and accountable licensing and non-licensing services.
Also a tax holiday regime is available for new domestic and foreign investment in specified business sectors, under which beneficial tax treatment is granted to manufacturing projects in high priority sectors i.e. base metals, oil refinery/petrochemicals, machinery, renewable energy and telecommunication equipment. Foreign Direct Investment in 2013 reached a record high of US $33 billion up 27% from 2012.

What brings you to Vizag?
Well with the new government taking over in Andhra Pradesh and the incentives that are being accorded to prospective investors here brings me to Vizag. We are here to explore business opportunities and many of our Indonesian investors are not aware of the opportunities here. So I am here to learn and then share the information with our investors back home.

How is it that even till today there is no direct flight from India to Indonesia?
Yes that is unfortunate but am hope full that soon we will have one. About 200000 Indians visit Indonesia every year while about 10000 Indonesians come to India. Indians travelling to Indonesia are given Visa on arrival. I would also like to inform that Indian infrastructure company GVK is developing the airport at Yogyakarta, which is about 433 kilometres from the capital city of Jakarta.

Are there opportunities wherein Indian buyers could interact with Indonesia companies directly?
Yes very much so. In fact our major annual trade event i.e. the 29th Trade Expo Indonesia 2014 will be ideal for this. To be held from October 8-12 in Jakarta this event is a great opportunity for Indian’s in the trade and investment sectors to interact directly with Indonesian companies to enhance their business relationship. The event will offer a highly selective range of world class quality products for exports from natural based commodities, high technology and strategic industry to creative industry covering not only products but also services which meet international recognition worldwide. Last year we had a good representation from the Indian side and India was our 4th largest buyer at the event.
(aditya@viscan.in)

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