Introduction

The economy of India is the tenth-biggest on the planet by ostensible GDP and the third-
biggest by buying power equality. The nation is one of the G-20 noteworthy economies, an
individual from BRICS and a creating economy that is among the main 20 worldwide dealers
for each the WTO. Indonesia is likewise delegated G-20 and the tenth-biggest by acquiring
power equality. Given the financial portrayal above, India and Indonesia have potential
monetary chances to co-work in speculation. Talking about Indonesia, development in total
national output (GDP) directed to 5.8% in 2013 from a normal of 6.3% over the past 3 years.
Development in settled speculation eased back to 4.7% in 2013 after solid increments of
around 9% yearly in 2010-2012. Private utilization stayed hearty in 2013, extending by 5.3%
and contributing portion of the development in GDP on the consumption side. Government
utilization developed by 4.9%, which flagged some change in spending execution.
The Indian-Indonesian relationship extend back for very nearly two centuries. In 1950, the
primary President of Indonesia, Sukarno, called upon the people groups of Indonesia and
India to "strengthen the friendly relations" that had existed between the two nations "for
over 1000 years" before they had been "upset" by pilgrim powers. India has an international
haven in Jakarta and Indonesia works a government office in Delhi. India sees Indonesia as a
key individual from ASEAN. Both countries had consented to set up a vital partnership. The
two nations have noteworthy respective trade. India and Indonesia are among the biggest
majority rule governments in the world. Both are part conditions of the G-20, the E7
(nations), the Non-Adjusted Movement, and the United Nations. As indicated by a 2013 BBC
World Service Poll, 51% of Indonesians view India's impact emphatically, with 21%
communicating a negative view.
The volume of annual bilateral trade between India and Indonesia is set to touch a
whopping USD 50 billion in next nine years from the present USD 9 billion. The largest
Indian Ocean rim countries, will work closely to prevent potential conflict and rivalry. Some
of the areas in which both the countries are planned to expand trade practices are counter-
terrorism collaboration naval cooperation including combined maritime patrols, regular
exchanges and joint exercises, intelligence sharing, and joint production of defence
equipment and systems. By 2025, the organization might add to a more solid Asian request,
set apart by quiet relations among the significant forces, win-win participation including
every one of the nations in the locale, open regionalism, determination and additionally
lessening of contentions, and the commonness of vital trust.
CHALLENGES AND RECOMMENDATIONS
The support of the political structure must be there towards the contributing nations
abroad. This can be worked out when remote financial specialists set forward their influence
for expanding FDI Capital in different segments like managing an account, and protection.
Important among the significant difficulties confronting bigger FDI is the need to accelerate
the usage of strategies, standards, what's more, directions. The indispensable part is to keep
the usage of arrangements in every one of the conditions of India at standard. India is
known to have tremendous measures of assets. There is labour and huge accessibility of
settled and working capital. In the meantime, there are some underexploited or unexploited
assets. India is unquestionably creating in a much speedier pace now than before however
notwithstanding that it can be recognized that improvements have occurred unevenly.

Indonesia is confronted by the less created of foundation. Street, power supply, harbour,
and whatever other foundations, which bolster the economy exercises are not in abundant
quantity. Speculation methodology of the prospective projects is still sufficiently long
contrasted with nations across the globe. There is a deficient supply of vitality required for
modern exercises related to the trade practices of twenty first century. Directions that block
speculation atmosphere are quite prevalent which prove the fact that foreign investment in
decreasing in the country. The dispersion of speculation is still amassed in Java and less ideal
usage of innovation exchange, hence Indonesia lags in the use of latest technologies across
the globe.
In the monetary space, India's exchange shortfall with Indonesia is the tenth biggest it has
with any nation. Indonesian interest in India still stays low, while Indian imports from
Indonesia still concentration for the most part on extractive enterprises like coal and palm
oil. Tourism is constrained because there are still no non-stop flights between the two
nations. While a joint review gather suggested that India and Indonesia arrange a
Comprehensive Economic Cooperation Agreement as right on time as September 2009,
pioneers are still at the exploratory phases of transactions. As both existing and new
thoughts are actualized throughout the following couple of years, close consideration
should be paid to not simply boosting the level of respective exchange and venture,
additionally settling issues with respect to the conveyance and substance of these streams.
TRADE STATISTICS BETWEEN INDIA AND INDONESIA (value in lacs Rs.)
It is quite evident from the figures presented below that the Indian exports to Indonesia are
on a constant decline with around Rs. 1,844,642.38 lacs for the year 2015-2016. This could
be attributed to the fact that Indias overall exports are declining in the same period. A
similar trend could be observed in imports from Indonesia as well with the figures being
249,029,808.12 for the year 2015-2016. There has been a negative growth percentage in the
overall trade as a result. Indias trade balance also stood low at Rs. -77,392,003.54 lacs for
the same period.

S.No. \Year 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

1. EXPORT 3,210,069.61 2,899,608.70 2,933,987.09 2,467,435.24 1,844,642.38
2. %Growth -9.67 1.19 -15.90 -25.24
3. India's 146,595,939.96 163,431,828.96 190,501,108.86 189,634,841.76 171,637,804.58
Total
Export
4. %Growth 11.48 16.56 -0.45 -9.49
5. %Share 2.19 1.77 1.54 1.30 1.07
6. IMPORT 7,041,989.62 8,096,569.76 8,903,542.02 9,184,535.26 8,579,957.42
7. %Growth 14.98 9.97 3.16 -6.58
8. India's 234,546,324.45 266,916,195.69 271,543,390.74 273,708,657.84 249,029,808.12
Total
Import
9. %Growth 13.80 1.73 0.80 -9.02
10. %Share 3.00 3.03 3.28 3.36 3.45
11. TOTAL 10,252,059.23 10,996,178.46 11,837,529.11 11,651,970.51 10,424,599.80
TRADE
12. %Growth 7.26 7.65 -1.57 -10.53
13. India's 381,142,264.41 430,348,024.65 462,044,499.60 463,343,499.59 420,667,612.70
Total Trade
14. %Growth 12.91 7.37 0.28 -9.21
15. %Share 2.69 2.56 2.56 2.51 2.48
16. TRADE
BALANCE
17. India's -87,950,384.49 - -81,042,281.88 -84,073,816.08 -77,392,003.54
Trade 103,484,366.72
Balance

Below is a trend analysis of the exports between India and Indonesia from the period 2011-
2015. This suggests that the Indonesian exports have been on a continuous decline since
2011 from 6.5 billion $ to less than 2 billion $ 2015. Indian exports too were decreasing until
2013 when they suddenly picked up pace and then plummeted to 12.25 billion $ in 2015.
http://wits.worldbank.org/CountryProfile/en/Country/IDN/StartYear/2011/EndYear/2015/TradeFlow/Export/Partner/IND/
Indicator/XPRT-TRD-VL

FDI COMPARISON BETWEEN INDIA AND INDONESIA

From the below mentioned charts we can see that the FDI inflows in India were following a
rough trend from the period between oct. 2105 to Sep. 2016, whereas the FDI inducement
in Indonesia has been on a continuous increase since the same period.
MAJOR GOODS EXPORTED FROM INDIA TO INDONESIA
The primary export items from India are manmade filaments, apparel and clothing
accessories, plastic and rubber articles, pharmaceutical products, tobacco and tobacco
manufactured substitutes. The value of the total exports from India to Indonesia amounted
to Rs. 171,637,804.58 lacs. In the year 2014-2015 and Rs. 87,831,810.90 lacs. in the year 2015-2016.
Below mentioned is a list of top 10 items of export.

2016-
2015-
S.No. HSCode Commodity 2017(Apr-
2016
Sep)
1. 02 MEAT AND EDIBLE MEAT OFFAL. 1,957.55 545.61
2. 03 FISH AND CRUSTACEANS, MOLLUSCS AND 32.15 7.74
OTHER AQUATIC INVERTABRATES.
3. 04 DAIRY PRODUCE; BIRDS' EGGS; NATURAL 4,765.82 1,402.14
HONEY; EDIBLE PROD. OF ANIMAL ORIGIN,
NOT ELSEWHERE SPEC. OR INCLUDED.
4. 06 LIVE TREES AND OTHER PLANTS; BULBS; 3.44 0.68
ROOTS AND THE LIKE; CUT FLOWERS AND
ORNAMENTAL FOLIAGE.
5. 07 EDIBLE VEGETABLES AND CERTAIN ROOTS 4.94 1.58
AND TUBERS.
6. 08 EDIBLE FRUIT AND NUTS; PEEL OR CITRUS 122.69 7.59
FRUIT OR MELONS.
7. 09 COFFEE, TEA, MATE AND SPICES. 1,438.49 767.23
8. 10 CEREALS. 708.68 130.35

MAJOR GOODS EXPORTED FROM INDONESIA TO INDIA

The major import items are tea, coffee, spices, edible vegetables, oils especially palm oil,
beverages, spirits and vinegar, nuclear reactors, electrical machinery and equipment etc.
The value of the total imports from Indonesia amounted to Rs. 249,029,808.11 lacs for the
period 2014-2015 and Rs. 116,785,564.21 lacs for the period 2015-2016.
 2016-
2015-
S.No. HSCode Commodity 2017(Apr- %Growth
2016
Sep)
1. 01 LIVE ANIMALS. 0.24
2. 03 FISH AND CRUSTACEANS, MOLLUSCS AND 816.33 793.67
OTHER AQUATIC INVERTABRATES.
3. 05 PRODUCTS OF ANIMAL ORIGIN, NOT 150.17 110.16
ELSEWHERE SPECIFIED OR INCLUDED.
4. 06 LIVE TREES AND OTHER PLANTS; BULBS; 100.53 129.72
ROOTS AND THE LIKE; CUT FLOWERS AND
ORNAMENTAL FOLIAGE.
5. 07 EDIBLE VEGETABLES AND CERTAIN ROOTS 7,655.17 4.28
AND TUBERS.
6. 08 EDIBLE FRUIT AND NUTS; PEEL OR CITRUS 42,637.31 6,706.00
FRUIT OR MELONS.
7. 09 COFFEE, TEA, MATE AND SPICES. 65,756.92 22,442.91
8. 11 PRODUCTS OF THE MILLING INDUSTRY; 17.13
MALT; STARCHES; INULIN; WHEAT GLUTEN.
9. 12 OIL SEEDS AND OLEA. FRUITS; MISC. GRAINS, 5,762.46 2,038.96
SEEDS AND FRUIT; INDUSTRIAL OR
MEDICINAL PLANTS; STRAW AND FODDER.
10. 13 LAC; GUMS, RESINS AND OTHER VEGETABLE 6,865.54 3,439.98
SAPS AND EXTRACTS.

LITERATURE REVIEWS

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

Comprehensive Economic Cooperation Agreement (CECA)
Perceiving that the present financial linkages between the two are critical yet
underneath their potential both the legislatures consented to embrace this joint review
for investigating the possibility of CECA. The review led by the JSG gives brief
diagrams of the financial profiles, the exchange and speculation strategies and the
exchange and venture profiles of India and Indonesia. The projection-assessments of
India's fares to Indonesia could reach to as high as US$ 20 billion by the year 2020.
The evaluations of fares from Indonesia to India could increment to US$ 20 billion by
2020. The CECA ought to be based on, and ought to go past the assertion came to
under, the ASEAN-India Free Trade Agreement

India and Indonesia: Trade and Investment Complementarities (Rahul Mishra)

In the antiquated past, the two countries used to exchange flavors, timber, minerals,
valuable stones, cotton and silk. This additionally helped in the spread of religion and
culture. The money related emergency of 1997/98 had likewise frustrated India versus
Indonesia, which, in the result of the monetary emergency, dove to a financial low
when its cash was cheapened against the universal wicker container of coinage
Keeping in mind the end goal to augment the increases from their two-sided relations,
notwithstanding, the two nations need to tread a centre way; a blend of looking for
 complementarities in the financial field. With the marking of the CECA, India and
Indonesia will accomplish the $50 billion respective exchange target.

Impact of India-ASEAN Free Trade Agreement: A crosss-country analysis using

applied general equilibrium modelling (Chandrima Sikdar, Biswajit Nag)
The arrangements amongst India and the ASEAN delegates amid the previous couple
of years have made impressive enthusiasm among analysts over the world. Buddy and
Dasgupta (2009) concentrated the tax calendar of India and made a preparatory
assessment of the India-ASEAN FTA. By dissecting India's dedication plan, and by
concentrate the creation structure of the ASEAN individuals, the present review
presumed that divisions, for example, tea, flavors, espresso and elastic will be
contrarily influenced. The marine items, materials and articles of clothing, and auto
segments enterprises are likewise liable to confront expanded rivalry. The review
brings up that the net impact of the exchange assention significantly relies on upon the
capacity of the Government of India to redistribute a portion of the expanded riches
picked up from this exchange consent to those businesses adversely influenced by the
assention. Buddy and Dasgupta (2008) presumed that, on the premise of a comparable
contemplate, India was probably not going to profit in the transient from the India-
ASEAN FTA. They pointed out that ASEAN was not a characteristic exchanging
accomplice of India, and, not at all like China, has not set up close relations with the
district. Nonetheless, the understanding may bode well in the long term, if India takes
a gander at the alternative of turning into a centre for administrations fares to the
ASEAN area.

Working and living conditions in Special Economic Zones in India and Indonesia
(Rachmi Hertanti &Laura Ceresna-Chaturvedi)
Multinational organizations from around the globe move their generation to South
what's more, South-East Asian nations due to the accessibility of modest talented
work compel, the low creation costs and budgetary motivators offered by the
administrations. Creating nations, for example, India and Indonesia have set up
Special Economic Zones to draw in outside direct speculation. This report analyzes
the foundation of SEZs in both nations, the controls that represent them and takes a
gander at the motivators, for example, charge exceptions, foundation, continuous
power supply and unwinding of work laws offered in two particular SEZs the Nokia
Tech Par SEZ in India and the Batam Free Trade and Free Port Zone SEZ in
Indonesia. The report closes with suggestions to enhance the SEZ laborers' living
also, working conditions. These are tended to governments as well as to organizations
and national work rights developments.

Indias Trade and Investment Cooperation with Indonesia -Where to Invest in

the Next Decade? (Anup Barman)
The paper asserts that the Indonesian interests in India were about $612 million, as
against Indian interest in Indonesia at just $64.9 million. China, Singapore, Japan and
Korea have developed as the greatest financial specialists in Indonesia. Indonesia's
Trade Minister Gita Wirjawan said India and Indonesia are yet to accomplish the
genuine capability of their monetary association and such gatherings would profit
both the nations. To understand the maximum capacity of participation India's
speculation require must go to the field of foundation area, media, air administrations,
and vitality assets including oil, gas, coal, and renewable vitality of Indonesia. The
issues extending of key collaboration through the venture must not be died down at
the season of speculation. It concludes that to fortify the India-Indonesian ties India
has the extent of speculation of no less than ten circumstances more notwithstanding
the present level of venture $64.9 million.