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India-Indonesia Relations

1. India and Indonesia have shared two millennia of close cultural and commercial contacts. During our respective struggles for independence, the national leaderships of India and Indonesia led by then Prime Minister Jawaharlal Nehru and President Sukarno collaborated closely in supporting the cause of Asian and African independence and later after the two countries became independent, the two leaders together laid the foundation of the Afro-Asian and Non-Aligned Movements at the Bandung Conference in 1955.
2. In the contemporary period, relations between the two countries have been elevated to a Strategic Partnership during the State visit of President Yudhoyono to India in 2005. Prior to that, there has been a regular exchange of high level visits with Presidents Wahid (2000) and Megawati (2002) paying State Visits to India and return visits by Prime Minister Dr. Manmohan Singh who attended the Golden Jubilee commemoration of the Bandung Conference in April 2005 and the State Visit of our President to Indonesia in December 2008.
Indonesian Vice President Jusuf Kalla visited India to participate in the Satyagraha Centenary Conference in January 2007. There has also been a regular exchange of Ministerial visits and a Joint Commission process co-chaired by the Foreign Ministers of the two countries.  In recent times, Minister of Road, Transport and Highways of India Shri Kamal Nath visited Jakarta to attend the Asia- Pacific Ministerial conference on Public-Private Partnerships for Infrastructure Development 2010 in April 2010.  Minister of Water Resources Shri PK Bansal visited Yogyakarta from October 10-16, 2010 for the 6th Asian Regional Conference of the International Commission on Irrigation & Drainage (ICID).
Minister for Health & Family Welfare Shri Ghulam Nabi Azad visited Yogyakarta from October 25-29, 2010 for the Partners in Population and Development (PPD) Conference and Meetings of PPD Executive Council and Board. Ms Mari Pangestu, Trade Minister of Indonesia visited New Delhi on 3 March 2011 to attend the Delhi Dialogue-III. Minister of State for Oil and Natural Gas Shri R.P.N Singh led an Indian delegation to Indonesia from April 3-6, 2011. Minister of Sports & Youth Affairs (IC) Ajay Maken was in Indonesia from May 2-6, 2011.

State Visit of Preident Yudhoyono in January 2011

3. The President of Indonesia, Mr. Susilo Bambang Yudhoyono paid a State Visit to India as the Chief Guest for India’s Republic Day from January 24-26, 2011. There were 17 MoUs/Agreements signed during the visit including the Extradition Treaty, Mutual Legal Assistance Treaty, Cultural Exchange Programme and MoU on Cooperation in the Education sector. The visit also witnessed signing of business deals worth $ 15 billion between the two sides. In the Joint Statement issued during the visit, inter alia, the two countries have agreed to the establishment of the Eminent Persons’ Group, set up a trade target of $ 25 bn by 2015, agreed to Biennial Trade Minister’s Forum and biennial Defence Ministers Forum and established an Energy Forum. It was also announced to extend tourist visa on arrival facility to Indonesian nationals.

4. The two countries signed a Defence Cooperation Agreement in 2001 and have had regular defence exchanges including exchange of high level visits, ship visits, officers studying in Staff Colleges in either country and joint coordinated patrols in the mouth of the Malacca Straits. The first meeting of the Joint Defence Cooperation Committee (at the Defence Secretary level) under the Defence Cooperation Agreement was held in Jakarta in June, 2007. The second meeting of the JDCC was held in New Delhi on 17-18 June, 2010.  Apart from the exchange of visits, ship visits and training cooperation, a beginning has been made in defence sales with Indonesia. INS Kesari participated at the ARF Disaster relief Exercise (Direx) held at Manado from 14-18 March 2011. It has been agreed to have a biennial Defence Ministers’ Meeting during the State visit of President Yudhoyono to India in January 2011.

5. Indonesia is India’s second largest trading partner in the ASEAN. Bilateral trade was US$ 13.2 billion (up from US$9.6 billion in 2009) in 2010. Indian exports to Indonesia was US$3.2 bn and imports stood at US$ 9.9 bn. India is Indonesia’s largest buyer of Crude Palm Oil (CPO) and an importer of its minerals (particularly coal and copper ore). India and Indonesia have concluded a study on a bilateral Comprehensive Economic Cooperation Agreement (CECA) with Indonesia and an announcement on the commencement of CECA negotiations was made during the recent visit of President Yudhoyono to India.

6. India has substantial investments in Indonesia in the textiles, steel, automotive, banking and resources sectors. Foreign investment from India in Indonesia dates back to the 1970s. In recent years there has been a new wave of investment focusing on the mining, the automotive and banking sectors. Major Indian companies operating in Indonesia include the Aditya Birla group which has a viscose fibre plant and downstream units, Essar which has a cold-rolled steel mill near Jakarta and Jindal Stainless Steel in Surabaya. There are two Indian motor-cycle manufacturers – Bajaj and TVS – in Indonesia.  The State Bank of India and the Bank of India have branches in a number of Indonesian cities. Tatas own 30% of the two largest coal mines in Indonesia. 40 Indian companies are currently mining or exploring coal blocks in Indonesia. Gujarat State Petroleum and Essar have won an exploration license for gas on-shore in Sumatra. Balmer Lawrie has signed a joint venture agreement for manufacturing grease and lubricants in Indonesia. In 2009, NALCO signed a joint venture agreement to establish an aluminium smelter and a 1250 MW power plant at a cost of US$ 4 billion in South Sumatra. Godrej has recently acquired, PT. Megasari, an Indonesian FMCG company. One Indonesian company, the Salim Group has invested in real estate and infrastructure projects in India.

7. There was major business deals signed during the visit of President Yudhoyono to India in January 2011. They are as follows:

  1. MoU between Regional Government of Central Kalimantan and International Coal Ventures Ltd to set up a mineral processing facility/steel plant for $ 3.5 bn
  2. Agreement between National Fertilizers Ltd. And PT Pupuk Sriwidjaja (PUSRI) for off take of fertilizers from Indonesia for $ 165 MN
  3. MoU between Bharat Heavy Electricals Ltd and PT Eastern Infrastructure International for coal-based power plant in Indonesia for $ 500 mn
  4. MoU between Ministry of Industry of Indonesia and TRIMEX Sands to cooperate in the field of Heavy Minerals for $ 1 bn
  5. Head of Agreement between Adani Group, PT Bukit Asam and Regional Government of South Sumatera to set up railway for transport of coal to the nearest port for $ 1.65 bn
  6. MoU between Regional Government of South Sumatera and Reliance Coal Resource Ltd for coal assets/rail line and port project for $ 1.5 bn
  7. MoU between Regional Government of Jambi and Reliance Coal Resource Ltd for coal assets/rail line and port project for $ 1.5 bn
  8. MoU between the regional Government of Jambi and Archean Energy and Infrastructure Pvt. Ltd. For integrated transportation infrastructure development and establishment of coal terminal for $ 300 mn
  9. MoU between PT Adani Global and Kendal Regency, Central Java and PT. Mega Urip Pesona to construct a coal-fired power plant for $ 3 bn
  10. MoU between PT Angkasa Pura I and GVK Construction for airport project at Yogjakarta for $500 mn
  11. MoU between PT Pembangunan Bali Mandiri and GVK for construction of airport in Buleleng, Bali for $1 bn
  12. Framework Agreement between Pipavava Shipyard, PT PAL Indonesia and SKIL Infrastructure Ltd for fast patrol boats, corvettes, light frigates, etc. for $ 1 bn
  13. MoU between PT Surya Kepanjen and SEW Trident Global for development of toll road on BOT basis for $ 100-200 mn
  14. MoU between PT Walden Global Services and Secure Matrix India for Informational Technology Security Transfer for $ 5 mn
  15. MoU between PT Multi Polar Technology (Lippo Group) and HCL Technologies on cooperation to work in IT services sector.
  16. MoU between Investment Coordinating Board of Indonesia and Tata Power on Capacity Building


8. A number of high profile commercial events have been held in Indonesia to give a boost to bilateral trade and investment relations between the two countries. These include the ‘Made in India’ Trade Exhibition organized by CII in Jakarta in August 2009, the India Invest Seminar and B2B Event held in cooperation with the India Chamber of Commerce on October 22, 2009 in Jakarta and the INDEE 2009 – the Indian Engineering Exhibition organized by the EEPC in Jakarta in December 2009. During the current year, the CHEMEXCIL organized an Indian Chemicals Exhibition in Jakarta from March 25-26, 2010. On March 24 2010, the EEPC organized a Buyer-Seller Meet in Jakarta and on March 29, 2010 the Embassy of India organized a Seminar on “India-Indonesia Trade & Investment Cooperation”. A delegation from FICCI comprising of eight companies dealing in traditional medicines visited Indonesia in November 2010 and a Buyer-Seller meet was organized.

9. In 2011, the Embassy of India and the Economic Association of India and Indonesia jointly organized the Seminar Partnering for IT Sector Excellence on 10 March 2011 to present India’s strength in the IT Sector to Indonesia and to strengthen cooperation in this sector. The seminar was supported by the Association of Software and Telematics of Indonesia (ASPILUKI). This was followed by Buyer and Seller Meet organized in collaboration with CHEMEXCIL India (The Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion Council) on Dyes, Agrochemicals, Speciality Chemicals & Cosmetics on 17th March 2011 in Jakarta. Embassy of India and PT Strategic Asia, Indonesia jointly organized a Seminar Series on ‘Increasing Indian and Indonesian Health Cooperation’ on 22nd, 23rd and 24th March 2011 in Jakarta to promote Indian pharmaceutical and health sector in Indonesia.

10. A Cultural Agreement was signed between the Governments of India and Indonesia in 1955.  As per provisions of the Cultural Agreement, Cultural Exchange Programmes (CEP) are signed between the two countries. CEP for the period 2011-2014 was signed in January 2011 during the visit of the Indonesian President to India. We have active cultural exchanges between the two countries. The focal points for this exchange are the two Indian Cultural Centres established in Jakarta and Bali.  The Embassy of India organized a Festival of India in Indonesia in 2009 that included 48 performances in 7 cities of Indonesia, a Food Festival, an Art exhibition and a fashion show. A Seminar was organized by ICCR in Jakarta and Yogyakarta in early October on India’s Historical and Civilizational Links with Southeast Asia.

11. India offers 125 ITEC and Colombo Plan slots to Indonesia every year and this assistance is greatly appreciated and valued in this country. We have in the past, established a Vocational Training Centre in Jakarta and have now established another Centre in Aceh since August 2010.

12. India was among the first countries to provide assistance amounting to US$ 1 million in relief supplies to Indonesia following the Tsunami disaster. India also donated US$ 2 million in relief assistance following the major earthquake in Northern Sumatra on 28 March, 2005. Two Indian Air Force IL-76 aircraft airlifted the relief supplies to Medan (North Sumatra) on 21st April 2005.  India delivered US$ 2 million worth of relief assistance to Indonesia after the earthquake in Java in May, 2006. A medical team from the Indian Navy also engaged in relief work in the affected area after these disasters. India offered an assistance of $ 100,000 for those affected by Mt. Merapi volcanic eruptions and tsunami in Mentawi islands in October 2010.

June 2011

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