New Delhi: India is now eyeing a landmark agreement with Indonesia for bilateral trade in domestic currency, real-time card recognition, and digital payments, following a similar deal with the United Arab Emirates.
The discussions took place during a meeting between Indian Finance Minister Nirmala Sitharaman and her Indonesian counterpart Sri Mulyani Indrawati, where they announced the initiation of an “Economic and Financial Dialogue” aimed at strengthening trade and investment ties.
Among the topics under consideration, both nations are exploring cooperation in digital technology and payment systems under the purview of their respective central banks. The focus is on promoting the use of local currencies, facilitating seamless transactions and boosting trade between the two countries, as highlighted by the Indonesian Finance Minister.
An Indian official revealed that the currency arrangement would resemble the one established with the UAE. This could mean Indian exporters settling their trade in Indonesian rupiah, while exporters of commodities such as palm oil receive payment in Indian rupees. Indonesia holds a prominent position as India’s largest trading partner in the Association of Southeast Asian Nations (ASEAN) region and ranks among Asia’s largest economies.
With bilateral trade reaching approximately $39 billion last year, Indonesia stood as India’s sixth-largest trading partner. The trade surplus of $19 billion was primarily attributed to significant shipments of palm oil and petroleum products.
The Indian official further emphasized the keen interest demonstrated by various countries in India’s digital public infrastructure. After successful collaborations with Singapore, the UAE, and France, Indonesia may join the ranks of nations leveraging India’s technological advancements.
Following her meeting with the Indonesian Finance Minister, Sitharaman underscored the areas of potential collaboration, including bilateral investment, financial services, and infrastructure development. She highlighted India’s expertise in digital public infrastructure and its ability to provide proven solutions for convenient and affordable digital payments. These solutions could aid Indonesia in achieving its goals of financial inclusion.
As negotiations progress, both India and Indonesia are optimistic about the prospects of enhanced economic cooperation and strengthened trade relations.