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Last Updated : Jul 09, 2019 07:56 PM IST | Source:

Commerce minister Piyush Goyal raises concerns over India's trade deficit with Indonesia

Goyal highlighted India’s concern on the import quota restrictions faced by Indian auto and auto component industries in Indonesia on completely built up units (CBU) and tyres

Commerce and Industry Minister Piyush Goyal July 9 raised concerns about India’s trade deficit with Indonesia which stood at $10.57 billion during 2018-19.

During a bilateral meeting with Indonesian Minister of Trade, Enggartiasto Lukita, Goyal said the balance of trade is heavily in favor of Indonesia and both countries need to work towards establishing sustainable trade by diversifying the export basket.

There is considerable potential for expanding trade in agricultural, automobiles, engineering products, IT, pharmaceuticals, biotechnology and healthcare sectors. "With a bilateral trade of $21.13 billion in 2018-19, Indonesia has emerged as the second largest trading partner of India in the ASEAN region after Singapore," a press release from the ministry said.


Goyal highlighted India’s concern on the import quota restrictions faced by Indian auto and auto component industries in Indonesia on completely built-up units (CBU) and tyres.

The restricted import quota prescribed by Indonesia for Indian vehicles in CBU condition has adversely impacted Indian exports. The long lead time for regulatory certification of new vehicles affects the launch of new products. Indonesia adopts standards for emission which is not commensurate with the global emission norms for fuel efficiency in automobiles, the release said.

Goyal said other competitors have better market access advantage over Indian automakers because of bilateral free trade agreements. Indonesian Minister assured Piyush Goyal he would address this gap.

The minister also requested the Indonesian side to allow Indian origin frozen halal buffalo meat free and directly to importers/ distributors of Indonesia through various important ports, without quotas and restrictions. The Indonesian side assured there will be no quota restrictions from authorised exporters as long as the quality is maintained.

On the potential for enhanced cooperation on health and pharma sector between the two countries,  the Indonesian trade minister assured Piyush Goyal he will take up the issue with importers in his country to source high quality and cost-effective pharma products from India.

Indonesia's pharma product imports total roughly $990 million and India’s share in it is only about $75 million.

India also requested the Indonesian side for more market access for India’s agricultural products like musk melon, bitter gourd, grapes, pumpkin and milk products, which is pending with Indonesia. India also sought recognition for export of agricultural products under the new Fresh Food of Plant Origin (FFPO) regulation of Indonesia.

Indonesia’s new FFPO regulation introduced from February 17, 2016, is a technical barrier which restricts exports from India.

The Indonesian side requested for parity on duty with Malaysian exports of refined palm oil with India where it is currently suffering 5 percent disadvantage. Goyal assured he will take up this issue with the concerned ministry.

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First Published on Jul 9, 2019 07:56 pm
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