Indonesian president arrives, $15 bn deals on the way

NEW DELHI - In a big boost to New Delhi’s Look East policy, India and Indonesia are set to ink around three dozen agreements, including an extradition treaty, and seal business deals worth $15 billion after the leaders of the two countries hold talks here Tuesday.

Accompanied by senior ministers and a 140-strong business delegation, Indonesian President Susilo Bambang Yudhoyono arrived here Monday on a three-day visit that aims at take burgeoning bilateral trade and investment to new heights. He is also the chief guest at the Republic Day parade Wednesday.

Yudhoyono will be accorded a ceremonial welcome at Rashtrapati Bhavan Tuesday morning before he joins Prime Minister Manmohan Singh for delegation-level talks.

The two sides are expected to sign a record 34 agreements after the wide-ranging talks. The accords will include an extradition treaty and expanding cooperation in combating terror, money laundering and exchange of information on criminal activities. Agreements dealing with economic cooperation, science and technology as well as culture and education will also be signed.

Economic diplomacy will be the centrepiece of the Indionesian presidential visit.

Indian companies are set to unveil new investments in infrastructure, natural resources, manufacturing and services in the South-East Asian country.

Before leaving Jakarta, Yudhoyono Monday announced that he hoped to help secure investment deals worth $15 billion during his trip to India. “The investment value is $15 billion, which includes cooperation in infrastructure, manufacturing, natural resources and services,” he said.

Indonesia has ambitious plans to spend $140 billion until 2014 on bolstering its infrastructure and reaching an economic growth target of seven percent.

An agreement on biennial meeting of trade ministers will also be inked. Expanding cooperation in the area of maritime security through enhanced naval patrolling will be among the issues that will be discussed.

The two sides are expected to announce a target of nearly doubling to $20 billion their burgeoning bilateral trade by 2015.

They are also likely to formally begin negotiations for a Comprehensive Economic Cooperation Agreement (CECA) next week. Indonesia has consistently backed a bigger role for India in the Association of Southeast Asian Nations (Asean) and in the East Asia summit.

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. Other companies like Essar and Jindal that are already operating in Indonesia also will add to the ventures.

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.

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

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.

Indonesia is looking at India, with its estimated 330-million middle class population with buying power, as a major market.