India-Indonesia CEOs Forum Pushes for Mutual Regulatory Reforms to Unlock Trade Potential
NEW DELHI, investortrust.id—Business leaders from India and Indonesia outlined a roadmap of reciprocal regulatory reforms during the third India-Indonesia CEOs’ Forum, positioning their economic partnership as a cornerstone for regional growth.
The dialogue, attended by executives from each nation and held alongside Indonesian President Prabowo Subianto’s visit, emphasized balanced concessions to address bottlenecks in bilateral trade, which reached $29.4 billion in 2023–24.
India and Indonesia, poised to become the world’s third- and seventh-largest economies by 2030 respectively, have deepened ties since signing a Comprehensive Strategic Partnership in 2018. This framework includes a Shared Vision on Maritime Cooperation in the Indo-Pacific, formalizing their alignment as maritime neighbors and strategic partners in a contested region.
Bilateral trade between the two nations has surged over two decades, climbing from $4.3 billion in 2005–06 38.84 billion in 2022–23 before moderating to $29.4 billion in 2023–24, driven by shifting global commodity demands.
Indonesia now ranks as India’s second-largest trading partner in ASEAN, with New Delhi emerging as a critical buyer of Indonesian coal (second-largest importer), crude palm oil (top importer), and other resources such as minerals, rubber, and hydrocarbons.
Balancing Regulatory Priorities
The joint statement highlighted reforms sought by both nations to improve ease of doing business. Indonesia acknowledged the need to accelerate licensing for imported goods, streamline customs processes, and adopt a more flexible approach to its Domestic Component Level (TKDN) rules, which mandate local content in government projects.
Meanwhile, India pledged to address investor concerns around overlapping regulations, infrastructure gaps, and retroactive tax disputes, with a focus on digitizing approvals and stabilizing policy frameworks.
“Investors in both countries play a vital role in job creation and technological advancement. Their challenges require equally urgent attention,” the document stated, underscoring the Forum’s emphasis on mutual accountability.
Amardeep Singh Bhatia (third from left), Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry; Ajay Shriram (second from left), immediate Past President of the Confederation of Indian Industry (CII); Piyush Goyal (center), India’s Minister of Commerce and Industry; Anindya S. Bakrie (second from right), Chairman of the Indonesian Chamber of Commerce and Industry (KADIN); and Hashim Djojohadikusumo (third from right), Indonesian business leader and Chairman of Arsari Group; during the India-Indonesia CEO Forum in New Delhi, January 25, 2025. Photo: Courtesy of Kadin
Sectoral Collaboration: Aligning Visions
The healthcare sector emerged as a focal point, with Indonesia seeking to leverage India’s expertise in cost-effective medical care. The forum urged Jakarta to simplify licensing for Indian doctors and telemedicine providers, which currently face restrictions on their scope of practice.
In return, India would seek to expedite approvals for Indonesian pharmaceutical investments and review intellectual property concerns, including compulsory licensing policies that deter foreign firms. Both sides endorsed public-private partnerships to build hospitals and promote medical tourism, aiming to bridge gaps in affordable healthcare access.
In agriculture, Indonesia’s hybrid seed import rules—which require local production after two to three years—were identified as a hurdle for Indian firms specializing in high-yield crops. Jakarta signaled openness to extending import windows for seeds requiring longer adaptation periods, while New Delhi pledged to reduce tariffs on Indonesian palm oil and address supply-chain inefficiencies, such as post-harvest losses caused by inadequate cold storage.
The two nations also agreed to explore joint research on drought-resistant crops, aligning with shared climate resilience goals.
Indian business leaders, sitting from left to right, P M Prasad, Ashok Minda, C P Gurnani, and N Senthil Kumar, during the India-Indonesia CEO Forum in New Delhi, January 25, 2025. Photo: Courtesy of Kadin
Renewable energy collaboration faced calls for clearer policy frameworks. Indonesia urged India to adopt single-window clearances for green projects and ensure tariff consistency to attract solar investments, while India highlighted the need for Jakarta to resolve delays in land acquisition and grid integration for joint ventures.
Both countries committed to advancing green hydrogen initiatives under the International Solar Alliance, aiming to position themselves as leaders in clean energy innovation.
The Forum recognized technology as a key driver of future growth, with Indonesia proposing harmonized data governance standards to ease cross-border digital trade. India, meanwhile, sought simplified certification processes for tech hardware in Indonesia and fewer patent extensions that delay generic alternatives. Executives from both sides emphasized opportunities in 5G infrastructure and automation, with Indian software firms offering to collaborate on smart manufacturing solutions tailored to Indonesia’s industrial needs.
Navigating Localization Policies
A recurring theme was the tension between domestic priorities and global supply chains. Indonesia’s TKDN rules and India’s “Make in India” mandates—both designed to boost local manufacturing—were acknowledged as potential barriers to foreign participation.
The joint statement recommended a phased approach to localization, allowing exemptions in sectors where domestic alternatives are scarce or substandard. For instance, India’s Production-Linked Incentive (PLI) schemes could permit gradual increases in local sourcing, while Indonesia’s TKDN policy could adopt adjustable thresholds for industries reliant on specialized imports, allowing phased compliance to account for gaps in local production capacity.
Indonesian business leaders, sitting from left to right: Masni Eriza, Rico Rostambi, Afifuddin Suhaeli Kalla, Jonathan Thahir, Simon A Mantili, and Patrick Walujo, during the India-Indonesia CEO Forum in New Delhi, January 25, 2025. Photo: Courtesy of Kadin
A Framework for Shared Prosperity
Co-chaired by India’s Confederation of Indian Industry (CII) and Indonesia’s Chamber of Commerce (KADIN), the Forum positioned itself as a model for equitable South-South cooperation.The nations agreed to establish bilateral task forces for healthcare, energy, and technology, with progress reviewed at the next Forum in Jakarta later this year. India announced plans to expand its “Digital India” platform to support electronic Certificates of Origin (e-COO), while Indonesia pledged to fast-track approvals for drugs pre-approved by global regulators.
As President Prabowo and Indian Prime Minister Narendra Modi oversaw the exchange of five sector-specific MoUs, the message was clear: mutual trust and incremental reforms will determine whether these demographic giants can transition from regional allies to global economic architects.
