Indonesia Welcomes Australia to Invest in Textile, Automotive Sectors

President Jokowi, accompanied by his cabinet ministers, attends a bilateral meeting at the Parliament House, Canberra, Australia, Monday (10/2). (Photo: Public Relations/Dindha Moerti)

Following the ratification of Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Australian investors are expected to show interest to make investment in textile and automotive sectors in Indonesia.

“We know that investment from Australia so far has not entered the top five of investment in Indonesia. The range is between US$400-700 million,” Coordinating Minister for Economic Affairs Airlangga Hartarto said during a press statement at the Hyatt Hotel Canberra – A Park Hyatt Hotel, in Canberra, Australia, Monday (10/2).

According to him, Australia benefited from the foreign exchange thread between Indonesia and Australia.

“It is expected that with through the IA-CEPA, even if the import duty will be reduced on average from 5% to 0%, it will encourage textile and automotive (industries),” Airlangga said.

Australia, according to the Minister, has a demand of US$1.1 million in automotive and commercial vehicle products such as trucks or SUVs that are well-received.

“Indonesia has the capacity. All we have to do now is to talk to the producers in Indonesia to accelerate the productions, not only those listed in the IA-CEPA but primarily the hybrids and electric vehicles,” Airlangga stated, adding that the hybrids and electric vehicles will only begin production in 2021.

The Minister also stated that the Government will also push for the combustion engine to the list as it is still in demand in Australia.

In the meantime, Minister of Trade Agus Suparmanto expressed hope that following the ratification of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Indonesian market access to Australia can increase.

“The increase of market access means reducing deficits as well as improving exports,” he said, adding that following the ratification of the IA-CEPA, Indonesian products are also expected to have more competitive prices. (MAY/EN)

Translated by: Fairuzzamani Inayatillah
Reviewed by: M. Ersan Pamungkas