India Indonesia Trade

Indonesia is the second largest trading destination for India in the ASEAN region.

Introduction

India and Indonesia have shared close cultural and commercial contact since the establishment of their relationship. The Hindu, Buddhist, and later Muslim faith travelled to Indonesia from the shores of India. The stories from the great epics of Ramayana and Mahabharata form sources of Indonesian folk art and dramas. The shared culture, colonial history and post-independence goals of political sovereignty, and independent foreign policy have a significant effect on bilateral relations.

India-Indonesia Trade

• Indonesia has emerged as the largest trading partner of India in the ASEAN region.
• The bilateral trade increased from US$ 26.04 billion in 2022 to US$ 38.84 billion in 2023 between India and Indonesia.
• Indonesia occupies the 35th position in FDI equity inflows into India with a cumulative FDI amount of US$ 652.65 million (April 2000-September 2023).

Major exported items from India to Indonesia with amount & quantity

• India exported 4,163 commodities to Indonesia in FY23.
• India’s export to Indonesia stood at US$ 10.02 billion in FY23.
• Major exported items from India to Indonesia include engineering goods (US$ 1.82 billion), followed by petroleum products (US$ 857 million), organic and inorganic chemicals (US$ 330 million), meat dairy and poultry products (US$ 256 million), and others (US$ 188 million) during April-November 2023.
• India’s export to Indonesia stood at US$ 4.44 billion during April-November 2023.

Major imported items by India from Indonesia with amount & quantity

• India imported 2,220 commodities from Indonesia in FY23.
• India’s import from Indonesia stood at US$ 28.82 billion in FY23.
• Major items imported by India from Indonesia include mineral fuels, oils, and waxes (US$ 6.5 billion); followed by vegetable oils and waxes (US$ 3.13 billion), iron and steel (US$ 1.15 billion), bulk minerals and ores (US$ 710 million), and inorganic and organic chemicals and precious metals (US$ 372 million), etc. in during April-November 2023.
• India’s imports from Indonesia stood at US$ 15.4 billion during April-November 2023.

Economic Relations and Investments

The economic relations between India and Indonesia have been growing significantly. Indonesia has risen to become the largest trading partner of India in the ASEAN region after Singapore. In 2022-23, Indonesia exported products worth US$ 28.82 billion to India creating history and turning India into its 4th largest export destination globally. The total bilateral trade in 2022-23 reached a record US$ 38.84 billion, registering a year-on-year growth of 48%. Both countries have set a target of US$ 50 billion in trade by 2025.

Recent Trends & developments

• In 2022, the Reserve Bank of India (RBI) and the Bank Indonesia (BI) signed a Memorandum of Understanding (MoU) on Saturday in Bali, Indonesia, to improve mutual cooperation between them.
• Hon’ble National Security Advisor (NSA), H.E. Mr. Ajit Doval, and Dr. Mohammad Mahfud, Coordinating Minister of Political, Legal, and Security Affairs, signed a Memorandum of Understanding (MoU) for security dialogue to further strengthen cooperation on political and security issues.
• MoU between the Narcotics Control Bureau (NCB) of India and the National Narcotics Board of Indonesia on combating illicit trafficking in narcotic drugs, psychotropic substances, and their precursors was signed in the 7th Joint Commission Meeting (JCM) held in Delhi on June 17, 2022.
• MoU between National Sugar Institute, Kanpur, and Politeknic Perkebunan LPP, Yogyakarta was signed in the 7th Joint Commission Meeting (JCM) held in Delhi on June 17, 2022.
• In the defence sector, both countries have been working closely and organized Samudra Shakti, a bilateral maritime exercise, and Garuda Shakti, a joint military exercise, every year.
• India and Indonesia launched a new trade channel on July 16, 2023, to better combat global issues and significantly enhance bilateral cooperation between the two nations. The newly inked India-Indonesia Economic and Financial Dialogue will look at bilateral investment, financial services, and infrastructure development as its areas of cooperation.
• India and Indonesia are soon going to have real-time settlement and trading in local currencies, Senior Government Officials said on the sideline of G20 Finance Minister Central Bank Governors’ (FMCBG) meeting under India’s presidency.
• India and Indonesia have jointly declared the commencement of the India–Indonesia Economic and Financial Dialogue (EFD Dialogue) in July 2023. The EFD Dialogue aims to enhance collaboration between the two nations, fostering a shared understanding of global issues. It pledges to provide a distinctive platform for mutual learning and policy coordination, thereby reinforcing the commitment to strengthen cooperation.

Conclusion

India and Indonesia had civilizational connections for more than two thousand years. Both countries being maritime neighbours and strategic partners have important and close relations. The two countries have the huge potential to grow further in the coming years with increasing bilateral and community relations.

Contacts

• Embassy of India, Indonesia
  Address: Gama Tower, 28th floor, Jl. HR. Rasuna Said Kav. C22,
  Karet Kuningan, Setiabudi, Kota Jakarta Selatan, Jakarta 12940.
  Telephone: +62 21 2522299
  Email: info.jakarta@mea.gov.in

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