Report of the Joint Study Group on the Feasibility of India-Indonesia ...

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5 cooperation include sharing <strong>of</strong> successful developmental experiences, capacity-building, people-to-people contacts, among o<strong>the</strong>rs. Specific areas <strong>of</strong> economic cooperation <strong>of</strong> mutual interest which both India and Indonesia can exploit and foster closer collaborations include energy (oil and gas exploration), power, agriculture and fisheries, forestry, human resource development, transportation, SEZs, mining, visa and work permits etc. 8. In a nutshell, <strong>the</strong> study demonstrates that significant economic complementarities exist between <strong>the</strong> Indian and Indonesia economies and evolving bilateral CECA has immense potential for trade and welfare gains that could be fur<strong>the</strong>r enhanced by including services’ trade and fostering investment cooperation. 9. The CECA should be built on, and should go beyond <strong>the</strong> agreement reached under, <strong>the</strong> ASEAN-India Free Trade Agreement. 10. To this end, <strong>the</strong> JSG recommends launching <strong>of</strong> negotiations between <strong>the</strong> two countries on <strong>the</strong> proposed CECA by constituting a Trade Negotiating Committee (TNC) covering substantially all trade in goods and services; investment; trade facilitation; and o<strong>the</strong>r areas <strong>of</strong> economic cooperation, as a ‘single undertaking’.
6 I. Overview The bilateral relations between India and Indonesia go back in history. Both <strong>the</strong> countries have had very close historical and civilizational interaction and shared vision on various dimensions. Commonalities in terms <strong>of</strong> size, diversity (ethnic and religious) and multiculturalism need to be acknowledged. Considerable economic reforms have been undertaken in both countries over time facilitating trade openness, investment liberalisation, fiscal and monetary policy reforms, infrastructural upgradation, among o<strong>the</strong>rs. Both <strong>the</strong> economies have emerged as dynamic market economies. Indian economy has remained on a high growth path, with some moderation in <strong>the</strong> recent growth projections, especially in <strong>the</strong> wake <strong>of</strong> <strong>the</strong> recent global financial meltdown. However, <strong>the</strong> economy is characterized by strong macroeconomic fundamentals and an expanding domestic market. As per projections by Goldman Sachs, India’s GDP growth would remain higher than 8% until 2020 and it will become <strong>the</strong> world’s 2nd largest economy by 2050. Similarly, McKinsey & Company projections suggest that India would become 5th largest consumer market by 2025 and India’s aggregate consumption would quadruple in next 20 years. In <strong>the</strong> area <strong>of</strong> trade, sectors have emerged with significant cost competitiveness in diverse areas <strong>of</strong> both goods and services. India has also evolved as a preferred investment destination due to several locational and policy-induced factors. Much <strong>of</strong> <strong>the</strong>se have happened due to a mix <strong>of</strong> policy reforms and private sector initiatives. Reforms in <strong>the</strong> areas <strong>of</strong> Trade Liberalisation, FDI Openness, Deregulated Exchange Rate Management, Banking and Financial Sector Reforms, Trade Finance etc. are noteworthy. India is also considered as a country with immense demographic advantage with a large proportion <strong>of</strong> young population entering into <strong>the</strong> work-force. This is understood to contribute to <strong>the</strong> human capital base at differing levels <strong>of</strong> skills. However, several developmental challeges relating to <strong>the</strong>se issues also remain in <strong>the</strong> areas <strong>of</strong> health and education and regional cooperation can play an important role in this regard. Indonesian economy has displayed growth dynamisam over decades. Its resilience in <strong>the</strong> wake <strong>of</strong> <strong>the</strong> current global economic crisis is also a matter <strong>of</strong> success, albeit problems
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56 - identify target areas for tech
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58 of prof
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60 3.10. Construction and Related E
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62 With an ICT penetration rate <st
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68 Banking Architecture (API). API
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70 Under the propo
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74 IV.4.9.2. India Given India's un
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76 is limited up to 49 per cent. On
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78 • Have substantial sectoral co
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80 • Availability of</str
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82 V. 5.3. Forestry Indonesia has a
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84 V.6. Cooperation in Transportati
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86 countries/ agencies, after signi
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88 For enhancing training and educa
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90 In a partial-equilibrium framewo
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92 VI.4 Trade in Services In respec
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1 Terms of Referen
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3 Table A.I.1 Composition o
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5 Table A.I.2 Composition o
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7 Annexure 2 Table A.II.I Sectors w
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9 Table A.II.I Sectors with Dynamic
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11 Table A.II.2 Sectors with Dynami
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13 Annexure 3 Table A.III.1 Indones
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15 Table A.III.2 Indonesia as an Im
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17 Annexure 4 Table A.IV.1 Potentia
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19 Table A.IV.1 Potential for India
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45 Table A.IV.3 Potential for <stro
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59 Table A.V.1 Items Amenable for I
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75 Annexure 6 HS 6-digit Code Table
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77 HS 6-digit Code Table A.VI.1 Ind
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85 Annexure 7 Table: Macro Economic
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87 Forecasting India’s exports to
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89 POLICY ON FOREIGN DIRECT INVESTM
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91 (iii) Other ser
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93 vii) viii) ix) x) xi) xii) xiii)
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95 30. Satellites - Establishment a
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97 Investment Incentives Annexure C
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99 India's share in Asia**) 2.46 4.
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101 Fig 6: Comparative Trend in RCA
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Report of the Joint Study Group on the Feasibility of India-Indonesia ...

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