The preliminary talks on the agreement took place during a visit by the Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan to New Delhi. The cooperation opportunities will take more concrete steps in the bilateral maritime partnership that will be held during India’s PM Narendra Modi visit to Jakarta on May 29-31, 2018.
One of the initiatives is the Indian government plan in developing a port in Aceh closer to Andaman and Nicobar Islands.
Panjaitan said the cooperation between two countries will have an impact on the security stability in the Indian Ocean and the Pacific Ocean. “By the existence of strong cooperation, the stability and security of the world can be equally achieved,” he added.
Furthermore, he insisted Indonesia does not want to be controlled by Belt and Road Initiative, as quoted by Times of India. Indonesia has a good relation with China but wants to balance Belt and Road Initiatives.
The Belt and Road Initiative is one of the clearest manifestations of China’s vision and influence. The infrastructure and investment underpinning the Belt and Road Initiative will streamline trade flows and lift economic activity in much of Asia, the Middle East, and North and Eastern Africa.
Beside the port investment, Indonesia offers many potential investments that can be developed together namely the aircraft industry, drones, oil palm, generic drug production, training to develop maritime human resources, plastic waste processing into energy, river clearance, and biodiesel technology.
He sees India’s technology products as affordable, functional, and suitable with Indonesia’s need. “I think it is important for a developing country like Indonesia, so do not look at the luxury things we do not need,” he said.
In the tourism sectors, there is potential to open more flight routes from New Delhi or Mumbai to Jakarta, Bali, and Medan. Last year, there was 485,000 Indian tourist visited Indonesia.
Cooperation between Indonesia and India will be a profitable step as these two countries have high economic growth among emerging market countries. India expected 6.5 per cent in economic growth by 2018, 7 per cent in 2019, and 7.6 per cent in 2020. Meanwhile, Indonesia’s economic growth is projected to reachÂ 5.2 percent in 2018. By 2019, according to Bank Indonesia forecast, Indonesia’s economic growth will reach 5.3 to 5.7 percent.
Indonesia’s exports to India decreased by 8.14 per cent to US$ 4.22 billion during January-April 2018 from US$4.59 billion in the same period last year. This record is very small or only 7 per cent of total exports compared to last year. Last year, India has shifted Japan as Indonesia’s third major export destination for non-oil and gas. The implementation of 15 per cent import duty for palm oil policy become a major cause of the exports decline to India.