Jakarta. India will likely remain an important economic partner for Indonesia in the next administration, as Jakarta seeks other markets and investors besides China and the US, according to the Indonesian Employers Association (Apindo).

In less than 24 hours, Indonesians across the archipelago will cast votes to decide who will rule the country for the next 5 years. There are three choices: former Jakarta Governor Anies Baswedan, Defense Minister Prabowo Subianto, and former Central Java Governor Ganjar Pranowo. 

Apindo chairwoman Shinta Kamdani said Tuesday that the outcome of the election would have no dramatic changes on Indonesia’s economic diplomacy policies towards the world’s largest democracy India.

“Considering the strategic importance of export and inbound FDI [foreign direct investment] across all presidential candidates, we really believe that India will remain to be seen as the most promising non-traditional economic partner by the Indonesian government, even in the next administration,” Shinta told a virtual conference. 

“Whoever wins [the election] will want to enhance Indonesia-India’s bilateral economic agenda,” Shinta said.

Government data shows Indonesia-India trade amounted to $28.2 billion throughout 2023. This, however, marks a decline compared to the $32.7 billion bilateral trade recorded the previous year. Nonetheless, the 2023 figures mark an almost two-fold increase compared to the pre-pandemic levels of $16.1 billion in 2019. Last year, Indonesia’s exports to India totaled $21.5 billion, thus giving Jakarta a $14.8 billion surplus.

FDI flows from India to Indonesia also reached $275.4 million in 2023. These FDIs went to 1,457 projects. India was Indonesia’s 14th largest foreign investor that year, just behind France ($302.8 million).

“I’d tell [Indian stakeholders] to maintain a business-as-usual approach and not miss out on Indonesia’s growth potential that it offers this year. Indonesia has the highest potential among ASEAN countries,” Shinta said. 

Shinta spoke of the three candidates’ trade-investment policies. 

Slides shown during the conference show that Anies' camp favors mutually beneficial free trade agreements (FTAs) and protection of domestic industry against unfair competition. Prabowo is eyeing export-oriented and more inbound investment-driven FTAs while seeking to reduce import dependency. Ganjar is pursuing export-oriented industrialization, but the former governor also wants to manage FDIs more carefully at the same time.

“All three candidates pledge to uphold open economic policy, but each has their own ideals on how to engage trade and foreign investment,” Shinta said. 

“All three aim for quite similar policy notions. … Despite the economic openness policy [the election winner] might uphold in the post-election, trade and investment measures –-either restrictive or facilitative-- are very much subject to change, especially those involving FTAs, imports, business climate reforms, and incentives to FDI,” Shinta said.

Indonesia and India have also been considering a preferential trade agreement. Both countries are already part of the ASEAN-India Free Trade Area (AIFTA), which eliminates 75 percent of the goods traded between the Southeast Asian bloc members and New Delhi.