Indonesia is keen on attracting Indian investments in manufacturing and value added processing than just in exploitation of its natural resources, according to Mr Andi M. Ghalib, the Indonesian Ambassador to India.
The trade between the two countries had reached about $20 billion in 2011-12 against about $13 billion two years earlier.
This growth has encouraged Indonesia to hike the targeted growth in bilateral trade to $45 billion against $25 billion previously. The target had been revised last month, he said.
The Indonesian national carrier, Garuda, is set to launch direct flights to India from June.
The Indonesian embassy here has suggested that the carrier link the four major metropolitan cities – Delhi, Kolkata, Mumbai and Chennai.
Indonesia's exports to India was $11 billion primarily based on natural resources such as coal, crude palm oil, wood, rubber, gold and copper.
Value addition
Indonesia had hiked the levy on coal mined by foreign companies there to benchmark Indonesian coal price to international market prices and to promote investments in value addition and manufacturing sector, he said.
According to Mr Leonard F. Hutabarat, Counsellor, Embassy of Indonesia, when companies invest in value addition the levy is lower.
For instance, taxes for a company sourcing crude palm oil will be halved if it sets up a refinery in Indonesia. The same applies to other resources like coal.
This follows demands by local governments in Indonesia that saw no economic benefit in foreign companies exploiting their natural resources.
Investments in factories in Indonesia will generate jobs and support the local economy, he said.
Trade delegation
Next month the Embassy has organised a 40-50 member trade delegation of potential Indian investors to Indonesia to showcase the business opportunities there.
Representatives from agriculture, plantation, textiles, telecom, education and IT sectors were on the delegation, he said.
India and Indonesia, the second and third largest economies in Asia after China, have signed 33 agreements to promote trade. They are also partners through the free trade agreement signed by the Association of South East Asian Nations.
This is the ideal time to promote investments between the two countries, the Ambassador said.