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India aims to export sugar to Indonesia
India is seeking to promote exports of its raw sugar to Indonesia as a part of its efforts to achieve US$50 billion in bilateral trade with Indonesia by 2025, its ambassador has said
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ndia is seeking to promote exports of its raw sugar to Indonesia as a part of its efforts to achieve US$50 billion in bilateral trade with Indonesia by 2025, its ambassador has said.
Indian Ambassador to Indonesia Pradeep Kumar Rawat addressed the intention during an India-Indonesia business forum on sugar trade in Jakarta on Tuesday, saying that India had exported sugar to Indonesia from the late 1980s to the early 1990s, but it was halted for unclear reasons.
“The idea [for India] is to trade more, not to trade less [with Indonesia],” he told reporters on the sidelines of the forum. “As we trade more, it is our expectation that we will have more sustainable trade [activities with Indonesia].”
The South Asian nation is the world’s second-largest producer of the commodity after Brazil, Rawat said.
On the other hand, Indonesia is increasingly becoming a sugar importer. In early 2018, the Trade Ministry announced that it had set an import quota of 3.6 million tons of raw sugar for industrial consumption to fill the gap in domestic sugar production. It was an increase from last year’s industrial sugar consumption of 3.4 million tons.
Nevertheless, Indonesia has recorded a surplus in its overall trade with India for the past five years.
In 2017, Trade Ministry data show that trade between Indonesia and India reached $18.13 billion, a slight difference from what Rawat said. From the total value, Indonesia booked a more than $10 billion surplus, the data show.
During a visit to Indonesia last month, Indian Prime Minister Narendra Modi said it was important for India and Indonesia to open up their economies to one another to achieve the target of earning $25 billion in bilateral trade by 2025.
India mostly imports crude palm oil from Indonesia, while its largest export to Southeast Asia’s largest economy is coal.
India is also looking to reduce its trade deficit, which increased to its highest in more than five years in June, Reuters reported on July 13, driven largely by a surge in oil prices and a weaker rupee.
During Tuesday’s event, Indonesian Trade Ministry Foreign Trade Director General Oke Nurwan said that as of June, the government had issued permits for 11 local companies to import 1.8 million tons of sugar.
However, India might not be able to supply the remaining import quota this year as the talks on sugar trade between the two countries are at a very early stage and need further discussion about other details, Oke said.
“Indian [stakeholders] are also requesting we look into [lowering] our import tariff of 10 percent for them as [currently] it makes their sugar less competitive than that from other countries, like Australia and Thailand, which are subject to only a 5 percent tariff,” he said.
If Indonesia granted the request, it would be able to request tariff cuts on other commodities, such as palm oil, although Oke claimed the government had yet to decide on the goods.
In addition to exports, India was also willing to share its sugar processing technology with Indonesian companies, thus helping the domestic industry upgrade its product quality, Oke added.
Prakash Naiknavare, managing director of India’s National Federation of Cooperative Sugar, claimed that the quality of Indian raw sugar was one of the best in the world, while India’s proximity to Indonesia offered a logistical advantage.
Also on Tuesday, Rachmad Hariotomo, chairman of Indonesian Refined Sugar Association (AGRI), said local businesspeople would unlikely be able to sign agreements in the near future as they were bound to existing contracts, adding that they would thoroughly study the prospects.
