India, Indonesia to Sign Free Trade Agreement
Oct. 20 – After signing the India-ASEAN Free Trade Agreement, Jakarta and New Delhi are now set to launch negotiations for a similar bilateral deal to open trade in goods and services between their respective countries.
The Indo-Indonesian Joint Study Group (JSG) after studying the advantages of an economic cooperation between the two recommends the launch of talks to negotiate a pact that can increase two-way trade to US$20 billion by 2020.
“The JSG finding suggest that there is a strong case for concluding a CECA between India and Indonesia as a first step towards an FTA in trade in goods, services, investments and other areas of economic cooperation,” says a report on the feasibility of the agreement. Last year’s bilateral trade amounted to US$7 billion with most of the trade favorable to Indonesia and India running a trade deficit of worth US$3.22 billion.
The pact would be similar lines to the agreement signed by India with Singapore that comprehensively covers all economic ties and is in line with the New Delhi’s ‘Look East Policy’ that encourages more engagement with Southeast Asian countries.
India’s agreement with ASEAN removes or reduces duty barriers on about 4,000 products of trade beginning January 2010. The Indian-Indonesian agreement will further expand on this agreement by focusing on certain products.