Reviving IndCham: A New Era of India-Indonesia Relations and Economic Cooperation
India and Indonesia aim to boost trade to USD 50 billion by 2025, with strengthened economic ties highlighted by the relaunch of the Indian Chamber of Commerce and significant contributions from the Indian diaspora.
India and Indonesia are poised to significantly strengthen their economic partnership, with a goal of reaching USD 50 billion in trade by 2025. India currently stands as the 14th largest investor in Indonesia, with approximately 80 Indian companies operating in the country. Recently, the relaunch of the Indian Chamber of Commerce in Indonesia (IndCham) marked a pivotal moment in this evolving relationship, underscoring the importance of economic collaboration and laying the groundwork for future growth.
The Indian diaspora in Indonesia, which includes 300 businesses and thousands of professionals, plays a crucial role in the local economy, reflecting the deep historical and cultural ties between the two nations. As comprehensive strategic partners, India and Indonesia have made significant strides in their economic and political engagements, further solidifying their relationship.
Bilateral Trade and Investment
The bilateral trade between India and Indonesia reached USD 38.8 billion in 2022, making Indonesia India’s largest trade partner in ASEAN.
In recent developments, India has revived air connectivity with Indonesia, introducing direct flights between major cities like Jakarta and Delhi. This increased connectivity is expected to further boost trade, tourism, and people-to-people exchanges.
The Relaunch of IndCham
The Embassy of India in Jakarta, in collaboration with IndCham, hosted the relaunch ceremony of the Indian Chamber of Commerce in Indonesia recently. The event saw the participation of over 150 representatives from Indian and Indonesian companies, including major players like Sinarmas, Adani, Tata Power, and Air India. The event was presided over by the Ambassador of India to Indonesia, Sandeep Chakravorty, and featured notable figures such as Pak Arsjad Rasjid, President Director of Indika Energy and KADIN Chairman, and the Head of CII Indonesia.
In his video message from the Paris Olympics, Pak Arsjad Rasjid emphasized the strong economic and strategic alignment between India and Indonesia. He highlighted the combined GDP of $5 trillion and a population of 1.7 billion as indicators of the countries’ potential to become a global growth epicentre. He also noted the significant milestones ahead, including the celebration of 75 years of diplomatic relations and the targets set by Indonesia’s new government for the next five years, focusing on economic growth, human development, and technological advancement.
The Significance of IndCham’s Revival
The revival of IndCham comes at a crucial time as the economic partnership between India and Indonesia has grown substantially in the past decade. The chamber, originally established in 1977, had become dormant over the years, especially during the pandemic. The relaunch signifies a renewed commitment to fostering economic ties and leveraging the shared aspirations and challenges of both nations.
India and Indonesia share similar economic goals, with policies focused on industrialization and ease of doing business. India’s initiatives like Atmanirbhar Bharat (Self-reliant India) and Indonesia’s Down-streaming policies reflect their common vision for sustainable economic development. Both countries aim to commemorate significant milestones in their histories—Amrit Kaal 2047 for India and Indonesia Emas 2045—by achieving economic prosperity and social progress.
Future Directions and Initiatives
Ambassador Chakravorty, speaking at the relaunch event, emphasized the untapped potential in the India-Indonesia relationship. He highlighted areas for future cooperation, including ocean economy, health, tourism, energy transition, artificial intelligence, and space exploration. To achieve these goals, businesses from both countries need a robust support system to facilitate ease of doing business and foster new collaborations.
The revamped IndCham aims to serve as a platform for networking, education, and innovation, aligning with the economic potential of the India-Indonesia relationship. The chamber’s agenda includes activities focusing on priority areas such as trade and investment facilitation, healthcare, digitalization, education, and skill enhancement.
Expert Insights and Legal Framework
Economist Sanjeev Sanyal, in his online talk, highlighted the shared economic landscape of India and Indonesia. As two large emerging market economies with vibrant democracies and a significant demographic dividend, both countries are well-positioned to lead the future of Asia in the Indo-Pacific region. Sanyal emphasized the importance of sustainable growth and collaboration in shaping a new narrative for the 21st century.
In addition, Bpk Fabian Pascoal and Bpk Mika Kriyasa from Dentons, a leading global law firm, discussed the implications of Indonesia’s Personal Data Protection Law 2022, set to come into full force in October. The law emphasizes data privacy and sets out key provisions that businesses must adapt to.
