The high case of COVID-19, forced the Indian Prime Minister, Narenda Modi, to find a strategy to cover the budget deficit of his government, which was feared to swell in this year - Photo by PTI

JAKARTA (TheInsiderStories) – Indian Prime Minister Narendra Modi is all set to travel to Indonesia on May 29 in his first ever visit to the country, according to Indian Foreign Affairs Officials. The bilateral engagements between Modi and Indonesian President Joko Widodo will take place on May 30 and 31.

Modi will discuss developing a seaport in Aceh province, which is only 80 nautical miles from India’s Andaman and Nicobar Islands. This plan falls under the purview of India’s dynamic Indo-Pacific strategy to counter China’s Belt and Road Initiative and maintaining peace and stability in the region.

Modi is expected to talk about strengthening security cooperation in the Indo-Pacific region with the support of the “Quadrilateral,” a security partnership comprising India, Japan, the US and Australia. Since Indonesia is not a part of the Quadrilateral Security Dialogue, pledging support could uncover new vistas for the largest Southeast Asian country in the sectors of maritime and defense security.

Bilateral trade between Indonesia and India actually started to grow significantly after December 2016 when both leaders met in India. However, trade between both nations remains far from its true potential. Therefore, both countries need to take more efforts to increase trade.

President Widodo had visited India earlier this year and was one of the chief guests at the Republic Day event. During the visit, Widodo had appreciated India’s support for the ASEAN-led mechanism included in the East Asia Summit.

In the meeting, Widodo conveyed the importance of efforts to increase economic cooperation because bilateral trade between the two countries has enormous potential. As for the architecture of the Indo-Pacific region, he would invite the key countries in the region to discuss the Indo Pacific concept.

Another matter conveyed by Widodo was the high increase of import duty tariff on vegetables oil commodity to India.

An increase in palm oil tariff will affect Indonesia’s palm oil exports. “If Indonesia’s palm oil exports are dwindling, I believe it will also affect the fulfillment of the growing Indian market,” president said.

Therefore, Widodo is expecting the Indian government to reconsider the tariff policy on vegetables oil.

Currently, Indonesian-Indian business and economic cooperation covers at least six sectors: mining, infrastructure, manufacturing, pharmaceuticals, the digital economy and services. In manufacturing, the two countries have been cooperating in investment and trade in the textile and automotive industries.

Indonesia is the biggest trade partner of India within the ASEAN region, while India is the biggest palm oil importer and one of Indonesia’s main export destinations for coal. Meanwhile, India’s investment in Indonesia has reached $286.6 million, up significantly from $55 million in 2016.

Moreover, according to Indonesia Statistics data, Indonesian-Indian trade reached a value of $12.9 billion in 2016, with Indonesian exports of $10.2 billion and Indonesian imports of $2.1 billion. The trade volume has increased by 28.7 percent in 2017, with Indonesian exports of $14.08 billion and imports of $4.05 billion.

Ahead of Modi’s visit, Indonesia’s coordinating minister for maritime affairs, Luhut Binsar Pandjaitan, visited India to talk over bilateral cooperation in the maritime sphere.

In a public lecture at the Nehru Memorial Museum and Library hosted by the Embassy of Indonesia in India, he shed light on Indonesia’s maritime policy and how India and Indonesia can cooperate in this sector.