India, Indonesia to sign 34 MoUs during Yudhoyono visit

By Mahendra Ved, IANS,

New Delhi : India and Indonesia will sign a record 34 memorandums of understanding (MoUs), half of them on business and investment, when Indonesian President Susilo Bamgbang Yudhoyono comes visiting next week.

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A 140-strong business delegation will be accompanying Yudhoyono – who will begin a three-day visit Jan 24 – to explore the potential for Indonesian investments in India.

The other MoUs will cover cooperation in combating terror, extradition, money laundering, exchange of information on criminal activities, culture and education, Indonesian envoy to India, Lt. Gen. (retd.) Andi M. Ghalib, told IANS in an interview.

Five major Indian business houses, including Tata and the Anil Dhirubhai Ambani Group, have made investment commitments in Indonesia worth $20 billion to be undertaken this year.

They will add to the ventures by other companies like Essar and Jindal that are already operating in Indonesia.

So far, Indorama, a textile group, and Harmony soap are among the few Indonesian brands operating in India while Mayora is setting up a food processing unit near Chennai.

A dozen ministers will be part of the 325-strong presidential entourage.

Ghalib said Indonesia is looking at India, with its estimated 330-million middle class population with buying power, as a major market and wants to make its presence felt.

India could potentially invest in Indonesia’s palm oil, food processing, rail and port construction. The Foreign Direct Investment (FDI) inflow from Indonesia was in non-conventional energy, construction, information and broadcasting and electrical equipment.

Ghalib quoted Indian minister Kamal Nath who foresees India becoming Indonesia’s largest investor in the next seven years. “I believe him,” he said.

Indonesia is India’s third largest trading partner in the Association of Southeast Asian Nations (ASEAN) and bilateral trade is targeted at $25 billion by 2015.

Trade rose from just $4 billion in 2005 to $14 billion in 2010. Indeed, the $10 billion target was reached by 2008.

Indonesia is also looking for English language learning facilities from India, besides institutions of higher learning.

Expansion of defence cooperation is also on the cards. But the envoy was not forthcoming, as it generally happens in security-related matters.

Arriving next Tuesday with his wife, Ani Bambang Yudhoyono, the Indonesian president will be the chief guest during India’s Republic Day parade.

This would be his second visit since 2005, and Ghalib said the relations have since been “up and up”.

“We have successfully curbed terrorism,” Ghalib said, adding that the joint working group (JWG) on terrorism, set up in 2005, had met twice.

Indonesia wants to reiterate its “strategic partnership” with India for which a pact was signed then, the envoy added.