India pushed Indonesia to allow Indian banking and healthcare professionals, such as nurses, into the South East Asian country, according to a statement from the Indian commerce and industry ministry.
The statement, made on the occasion of the Indian trade minister Anand Sharma’s visit to Jakarta, said the minister raised the issue in a meeting with his Indonesian counterpart Gita Wirjawan. “Opening up the two economies for service trade would be a win-win situation for both the countries,” Sharma told Wirjawan, the statement said.
India has signed a free trade agreement in services and investment with the Association of South East Asian Nations (ASEAN), of which Indonesia is a prominent member. The agreement came into effect in October last year. However, Indonesia does not allow movement of professionals in health and banking sector, the Indian ministry statement noted.
Indian healthcare professionals such as nurses and doctors work in several countries such as the United States and United Kingdom and those in the Middle East and Europe. Remittances from such professionals form an important part of India’s services earnings and helps the country balance its trade deficit caused by the import of oil and manufactured goods.
Sharma also pushed for movement of professional under mode IV both in context of India-ASEAN FTA as well as further investment opportunities in future, the ministry said. He also told his Indonesian counterparts to remove what he called non-tariff barriers for the import of Indian pharmaceutical products into the country and allow Indian bovine meat (beef) into Indonesia.
“..this would benefit Indonesian consumers by bringing down prices and providing opportunities for investments from India,” he said.
Partly due to the trade agreement with ASEAN, trade between India and Indonesia has boomed and the two countries are likely to meet their bilateral trade target earlier than expected, the Indian trade ministry said. “We now see ourselves achieving the next target of US$ 25 billion by 2015 comfortably,” Sharma said.
India’s current foreign trade in goods is around $550 billion a year, including about $350 billion in imports. India also exports about $100 billion of services.
India imports far more than it exports to Indonesia.
Total exports to Indonesia were US$6.56billion in 2011 as compared to US$ .43 billion in 2010 while total imports from Indonesia were US$13.57 billion in 2011 over US$9.69 billion in 2010.
Bilateral trade between India and Indonesia has been US$20.136 billion in 2011 while it was US$14.128 billion in 2010. India-Indonesia bilateral trade has grown at a robust compounded annual growth rate of about 30% over the last 5 years, the ministry said.
In addition to the FTA, the two countries are also working on a bilateral Comprehensive Economic Cooperation Agreement or CECA.
Sharma also noted that new mining laws and regulations in Indonesia are starting to affect Indian-owned mining operations in the country. Indian mining companies are now obliged to export coal at benchmarked prices announced monthly by the Ministry of Industry in Jakarta.
“This has upset the calculations of a large number of IPPs who had submitted bids in India for power projects assuming certain (lower than benchmark) pricing of coal on the basis of coal mines operated by them in Indonesia,” the Indian commerce ministry said.