Indonesia woos Indian carriers to boost trade

NEW DELHI: Indonesia is keen on Indian carriers starting flights to the country and renewing their air services agreement as part of efforts to boost bilateral trade and commercial relations, people familiar with developments said.

The leaders of India and Indonesia had directed civil aviation authorities of both sides to discuss enhancing of traffic rights through bilateral air services consultations during Prime Minister Narendra Modi’s visit to Jakarta in May 2018. They had also emphasised the urgency of establishing more flight connectivity. “Air connectivity continues to be a challenge as no Indian carrier is flying to Indonesia now. Given the number of Indians who visit Indonesia every year, the routes should be profitable for Indian airlines,” a person said.

During 2017, about 485,000 Indian visitors – or more than 1,300 a day – had travelled to Indonesia and the number for 2018 was expected to be about 600,000, the people cited above said.

The issue of Indian carriers starting flights had become more pressing as Indonesian airlines will touch the limit of 28 direct flights a week to India under the existing air services agreement that has been in place since 2011, they said.

Garuda Indonesia had started direct flights between Bali and Mumbai from April 2018 and Batik Air and Air Asia Indonesia have launched flights serving Indonesian and Indian cities. Both countries had held civil aviation consultations in New Delhi last September but there had been no movement on this issue.

The people also said there a lot of room for increasing bilateral trade, which had touched almost $20 billion in 2017, with Indonesia’s exports of coal and palm oil accounting for almost half the trade. At the same time, India’s exports of rice and bovine meat had increased and Indonesia is discussing the import of sugar from India, they said.

Indonesia has also invited Indian businesses to help develop the port on Sabang island at the northern tip of Sumatra and close to the Malacca Strait. The island has a 40-metre-deep natural harbour and efforts are underway to convince Indian businesses of the advantages of investing there, they added.