The Indonesia has remained an important trade region . it is imported from when Sri vijaya and then later Maja pahit traded with China and India. Indonesia has a mixed economy in which both the private sector and as well as public sector. The country is the largest economy country in Southeast Asia and the Indonesia is a member of the G - 2o major economy.
Indonesia's external trade improved in 2010 .In 2009 the indonesia's trade decline because of the global financial crisis of the indonesia.Eexports and imports of Indonesia have rebounded vigorously since 2009, with indonesia's imports growing faster than exports.
China and India's strong economic expansion have increase Indonesia's exports of coal and palm oil, and increased the export of rubber products and base metals.
China, India and South Korea have been increasing their imports from Indonesia in recent years, because of their high demand for mineral fuel. China and India will remain the most importer market for Indonesian palm oil.
Indonesia's Exports: Commodities
There are major commodities which are exported by Indonesia :
rubber
Electrical appliances
textile
plywood
Oil and gas
Indonesia's Imports : Commodities
There are major commodities which are imported by Indonesia :
Machinery and equipment
Chemicals
Fuels
Foodstuffs
As per the major partner of Indonesia as of 2010 along with the percentage of import :
country
import in (%) 2010
Singapore
16.9
China
11.8
Japan
11.7
Malasiya
6.9
Us
6.1
Soth Korea
5.4
Thailand
4.9
Here , this table shows that as per the import of Indonesia of 2010, the major import partner of Indonesia is Singapore , china, japan, malasiya, Us, south korea, and thiland.
For entering in to Indonesia 's major importer player ,india have to export to Indonesia these commodities which are mostly imported by other country such like as: machinery, equipment, fuel, foodstuff etc.
The graphical representation of the indonesia's major partner of importer as per the 2010's measurement :
Link between Indonesia- india for international trade
Indonesia's key exports to India mostly consist of vegetable oil, crude palm oil, coal, copper ore, cashew nuts, newsprint, chemicals and natural rubber. and while, India's primary exports to Indonesia for nylon thread, organic chemicals, iron and steel products, synthetic fiber and cotton.
In the year as of August 2010, Indonesia's exports to India has $6 billion, a 34.7 percent increase compared to the same period of 2009. It recorded a surplus of $4.6 billion in its trade with India in the first 3 quarter of 2010.
In 2010 bilateral trade targeted up to $ 10 billion but in 2010 its actually reached at $ 12 billion from the $4 billion in 2005.
India's exports have almost trebled from the last five years, the products which are India exports to Indonesia are gems and jewellery, machinery and equipment, raw material, minerals etc. while Indonesia exports to india such as chemical, engineering product, precious stone etc,.according to government meeting both the countries promote for better trade and reassure for the business community of both the countries.
India - Indonesia Trade (Year to Year Trends)
Sr. no
year
2006-07
2007-08
2008-09
2009-10
2010-11
1
Export
1380.20
2032.96
2164.17
2559.82
3063.36
Growth
0
47.29
6.45
18.28
19.67
2
Import
3008.11
4181.96
4828.21
6666.34
8656.66
Growth
0
39.02
15.29
38.27
29.86
At a trading view point Indonesia is a member of General Agreement on Tariffs and Trade (GATT) and ASEAN Free Trade Agreement (AFTA). India regards Indonesia as a key member of ASEAN free trade agreement. Both the nations had agreed to establish a strategic partnership.
Political situation of Indonesia
Indonesia's political system is a constitutional democracy system for the international trade. The country adopted protectionist trade system and industrial licensing policies for the misguided effort to promote industrialization. Instead, these policies made disturbed for manufacturing and smothered non-oil export growth.Indonesia significantly reduced its trade barriers and consequently enjoyed with the manufacturing boom that lasted well over a decade. Over the last few months, the Indonesian authorities and government have begun to re-introduce barriers to foreign trade and investment, with the intention for promoting more industrialization, domestic investment, and employment.
India and indonesia agree for fast track of international trade:
As on March 5, 2012: ( as per the jakarta business report)
India and Indonesia agreed to fast track the ongoing negotiations for the comprehensive market and for enhancing the bilateral trade relation between the both countries. In october,2012 both the countries started negotiations for CECA (comprehensive economic co-operative agreement) which consist trade of goods, service and investment.
India and Indonesia have identified five areas for working in joint group:
manufacturing
skill training and healthcare
pharmaceuticals
mining, agro and food processing;
Research and development
Government trade barriers of indonesia
Trade barriers which are made by government authority and public authority for import and export of the goods and services with the another country.here some political trade barriers which are facing by india for export and import of the goods and services.
Custom duties:
Export from the india which is import for the indonesia.importation fo the goods in to tndonesia must be declared in to the custom authority using import declaration form of the indonesia. Indonesia have to fulfill the obligation as a importer.
Duty rate:
At the time of import from the indonesia Duty rates in india is can be on the percentage of the value of product.an average duty rate is 11.9% .and some goods have no any duty rate like on product such like laptop, and any electronic products.
Government procurement :
As a result of the government rules due to common practice for produce goods and import goods with the connection of public authority and as well as authority of state, regional and local authoroties.
Export for product from india:
India can not export product like primary product, finished product and intermediate product in to Indonesia.India have to take permission by government license, it is differently treatment at different country.
For forien direct invest:
For operation of the company and invest in Indonesia is restricted on the profit and its also apply on the poor business, it has also restricted for set up the factory and establish any production facilities.
Rules and standard:
There is restriction for import and sales of foreign product and also restriction on technical goods. India have to follow technical rules for export and import for a technical roduct like laptop, and technical product. Indonesia constituted technical rules for protecting animal, plant,health of the human being. For importing of the product import license is must required.
There are other trade restrictions are based on regulation and principle for quality matters and as well as for maintaining the product quality, for consumer protection, for education and service qualification. There are rules also relating to patent and trademark protection of the Indonesia.
Economic environment of the Indonesia
Indonesia is one of the largest economy in South-east Asia and indonesia is one of the emerging market economies of the world.india and Indonesia have historical and cultural linkages for trade and investment.india and Indonesia have very close constitute for the international trade. Economy mainly consist the following factor:
Table shows the economic factor performance of Indonesia from 2006 to 2010
factor
2006
2007
2008
2009
2010
Poverty
17.8
16.6
15.4
14.2
13.3
Gdp
5.5
6.3
6
4.6
6.2
Inflation
18.1
8.3
8
8.3
8.1
Gni ($)
1950
2160
2500
2160
2500
Debt
4.3
4.8
4
4.8
4.3
There are many companies of india which are consist with the cashew nut and pieogen pea industry.both the countries tie up for research , techniq of training , expert knowledge for export service sharing seminar etc. Indian companies private invest on the industry such like the jute, soybean, corn, rice that type of agricultural product.
India's better progress in the bio- diesel technology, for house hold ,and for growing of commodity.
In fisheries industry Indonesia provides greater opportunity for co-operation of Indian company. Fisheries industry of the india as well as development of marine technology.
Indonesia would like to produce various training service from the india in certain area:
In broad casting , online media, management expertise and operational expertise in data base, audio visual, etc.
Reporting system and information processing for various publication.
For government sector and as well as for private sector information technology and computerized system.
Indonesia also encourage to Indian companies for getting the opportunity for establishment of call center in service sector.
Indonesia's co-operation to india
At a service sector,Indonesia would like to establish various training centers and training programme with the help of Indian country for enhancing the research and development.
At a airlines,Both the country try to enhance bilateral relationship , and india has given the permission to Garuda airways for four flight in a week.
At a health care center,Indonesia would like to co-operate with Indian pharmecutical companies. And Indonesia wants to do joint venture with the Indian pharmecutical companies for producing reasonable and better medicin for population of Indonesia.
Indonesia attract from the medical treatment from the Indian hospitals.
At a construction sector, Indonesian company hoped from the Indian company that india can help for the expert training field, expert engineering,and research and development department.
Range of projection of india's export to Indonesia and indonesia's export to india
India's x to Indonesia
Indonesia's x to India
year
range
range
2010
1197.48
2669.44
2355.60
3953.18
2015
1437.95
6064.45
2850.98
4111.37
2020
1678.42
7777.25
3346.37
9660.91
There are mainly two sectors of particular interest in which Indonesia seeks to co-operate with India are:
1) textile and textile products
2) iron and steel.
For enhancing the textile and textiles products Indonesia needs mordenization of the textile pattern, various textiles machineries, environmentally friendly manufacturing technologies, etc.
For the iron and steel industry Indonesia majorly efforts to reach at the global competitiveness. For achieving the global competitiveness Indonesia have to focus on certain criteria:
cost,
quality,
delivery time,
skills,
technology, and
optimal utilization
local natural resources
india has already help to Indonesia for achieving the criteria for the enhancement of the global competitiveness. And both country creating the stronger bilateral trade relationship for the international trade.
Legal aspect of the Indonesia
The law system of Indonesia is based on the civil law system.indonesia is a democratic countrya as based on its constitution.the civil law is adopted by the Indonesia.civil law consider the criminal act and criminal procedure to the court.
Legal system of indonesia for international trade
Standard and special requirements
For import of the goods and export of the goods must be registered with the ministry of health. For the import of the medicine must be special permit from the general director of medicine. The import of hypodermic needles, acetic anhydride and opium pipes ther is a special license delivered by the Director General of medicine and for the food control.
Labeling
For the any import of food product must be labeled in Indonesian English. With the food name, brand name,composition, net weight, content, etc. the register no. assign by the ministry of the health sector.all perishable good have expiry date. Certain special food require the code of production.
Distribution system
Foreign investor can not allowed for taking goods in directly in the open market but foreign company have to register to the ministry trade and industry.without the registration foreign company not allowed to keep goods in local market directly.
Free import :
Tobacco products : 50 cigars or 200 cigarettes or 100 grammes of tobacco;
1 litre of liquor
A reasonable quantity of perfume;
Personal goods up to a value of USD 250.- per passenger or USD 1,000.- per family
Restricted
(Video) cameras, portable radio, cassette recorder, and sport equipment
Film pre-recorders, video tapes, video laser disc, records and computer software must be screened by censor board.
Chinese medicines and printings, , firearms and ammunition, pornography, fresh fruit, cordless telephone which are not permitted except for those holding licence from the ministry of industry and health.
Government law:
International law
International law which is legal entities and capacity for any foreign country to enter in to the country for international trade.its consist maulti lavel country and as well as national level country.
Administrative law
Administrative law of Indonesia suggest for the administrative behavior of the trade and determine the efforts of the executive government. Its consists administrative complaints and administrative decesions.
Import law
As per the import law of Indonesia basic requirement is necessary for international trade:
Import license
Registration under the custom office
Tax payer id
Original invoice
Property law
Different type of property law for different type of use of property such like as right of ownership, right of use, right of build, right to rent , right of exploitation, etc.
Environmental law
Environmental law is law for keeping country like eco friendly country. So the report of the product compulsory for the each and every product under the environmental impact assessment.its also analysis environmental risk of the particular product.
Thus these all are the laws which are required for the international trade with the Indonesia . and its one type of restriction only for the protection of the customer, live being , country's capacity of the bilateral trade.
