Indonesia, India Agree on Palm Oil, Sugar, Rice Trade
Date 4 November 2019
The Indian Government has agreed to the Indonesian Government’s request on palm oil export tariff adjustment.
However, the Indian Government also requested Indonesia to import their rice and raw sugar, Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto has said.
“Today, the palm oil tariff, including CPO (Crude Palm Oil), RBD (Refined, Bleached, Deodorized) and Refined Bio Blended, is similar with that of Malaysia. Initially, Indonesian palm oil tariff was 5% lower than Malaysia’s but PM India Narendra Modi has agreed to President Joko “Jokowi” Widodo request to increase the price,” Airlangga told reporters in Bangkok, Thailand, Sunday (3/11).
However, as an exchange to this policy, the Indian Government has requested Indonesia to buy their rice and raw sugar and the Indonesian Government has started purchase their commodities.
“We will increase the amount according to the needs. As of today, our trade balance with India shows a positive growth with US$8 billion surplus. The highest was US$10 billion in 2017 with coal and palm oil as main commodities,” Airlangga said.
Airlangga also highlighted the Indian role regarding RCEP (Regional Comprehensive Economic Partnership).
For the record, the RCEP is a proposed free trade agreement (FTA) between the ten member states of the ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and its five FTA partners (China, Japan, South Korea, Australia and New Zealand).
“The RCEP is the world’s largest trade bloc, even surpassing the European Union. The EU’s GDP is around US$18 trillion, while the TPP (Trans Pacific Partnership) is around US$11 trillion and RCEP will have the biggest GDP with US$27 trillion. In terms of trade, RCEP covers US$11.5 trillion, while EU’s is at US$12.5 trillion and the TPP is at US$5.8 trillion. The RCEP also encompasses nearly half of the world’s population at 3.6 billion people, far bigger than EU and the UN. Thus, the world leaders [at the ASEAN Summit] have pushed for the agreement to be finalized soon,” Airlangga said.
However, Minister of Trade Agus Suparmanto said that India is eager to join the trade agreement since ASEAN is their most important partner. “The discussion on RCEP is still ongoing. I need to discuss it further with ministers of the RCEP member countries,” Agus said. (SLN/RAH/ES)
Translated by: Estu Widyamurti
Edited by: M. Ersan Pamungkas