In a progressive step towards reinforcing economic ties, India and Indonesia recently launched the India-Indonesia Economic and Financial Dialogue. The initiative is designed to improve trade, stimulate mutual investment, aid in infrastructure development, and enhance financial services between both countries. The focus will also include cooperation in digital technology, payment systems, and increased usage of local currencies.
Finance Minister Nirmala Sitharaman, who announced the Dialogue on Sunday, expressed her optimism about its potential to advance the global agenda from the perspectives of developing and emerging economies. Sitharaman views the dialogue as a path to heightened cooperation between India and Southeast Asia, contributing to the overall stability of the global economy and financial situation.
The announcement was made on the margins of the third meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG). Sitharaman and Reserve Bank Governor Shaktikanta Das are set to co-chair the two-day FMCBG meeting commencing on Monday.
Sitharaman stated that areas of cooperation would entail bilateral investment, financial services, and infrastructure development. She suggested that India’s expertise in digital public infrastructure could present convenient, affordable digital payment solutions aiding Indonesia in achieving its financial inclusion goals.
Both countries, considered fast-growing economies, share similarities and are active participants in multilateral organisations such as the G20, WTO, and East Asia Summit. India recently assumed the G20 presidency from Indonesia and is committed to addressing several ongoing issues.
India’s 1991 ‘Look East’ policy and the ensuing ‘Act East’ policy have been pivotal in fostering commercial and cultural bilateral ties between India and Indonesia. Indonesia now stands as India’s primary trading partner in the ASEAN region, with the trade value increasing eight-fold since 2005, reaching USD 38 billion last year.
Indonesia’s Finance Minister Sri Mulyani Indrawati, speaking on the occasion, recognized the potential for increased trade between the countries. Indrawati underlined the dialogue’s significance in addressing development issues, climate change, global public health, and strengthening investment cooperation. The ministers also discussed potential collaboration in digital technology, payment systems under central banks, and utilisation of more local currencies.
Indrawati extended her gratitude to Sitharaman for India’s support regarding Indonesia’s candidacy for membership in the Financial Action Task Force.
