A MoU is likely to be signed for setting up of a biennial Joint Trade Ministers’ Forum which would meet once in two years on regular basis. There will be some other bilateral agreements and MoUs covering trade and investment, political, security, economic, science and technology, media, education and cultural spheres.

After the delegation level talks, a number of major deals are likely to be inked covering the areas of resources, infrastructure, manufacturing, natural resources and services at the Business Summit jointly hosted by the three apex industry bodies in India on January 25. These deals may pave the way for India to become one of the largest investors in Indonesia.

Dr Yudhoyono who arrived today is leading strong delegation of Cabinet Ministers, eminent personalities, business leaders and media persons. He will be the Chief Guest at the Republic Day Parade on January 26.

Indonesia is already the largest supplier of crude palm oil to India. India gets crude palm oil not only from Indonesia but also from Malaysia. India also imports refined palm oil but the import of crude palm oil is significant.

Indonesia is a country which is blessed with all types of natural resources. Indonesia has deposits of very high grade coal across the country which are normally imported for Indian steel plants. So, major agreements in the field of sourcing or investing in coal mines in Indonesia may see the light of the day.

India has substantial investments in Indonesia in the textiles, steel, automotive, banking and resources sectors. Foreign investment from India in Indonesia dates back to the 1970s. In recent years there has been a new wave of investment focusing on the mining, automobile and banking sectors. Major Indian companies operating in Indonesia include the Aditya Birla group which has a viscose fibre plant and downstream units, Essar which has a cold-rolled steel mill near Jakarta and Jindal Stainless Steel in Surabaya.

There are two Indian motor-cycle manufacturers – Bajaj and TVS - in Indonesia. The State Bank of India and the Bank of India have branches in a number of Indonesian cities. Tatas own 30% of the two largest coal mines in Indonesia. 40 Indian companies are currently mining or exploring coal blocks in Indonesia. Gujarat State Petroleum and Essar have won an exploration license for gas on-shore in Sumatra. Balmer Lawrie has recently signed a joint venture agreement for manufacturing grease and lubricants in Indonesia.

In 2009, NALCO signed a joint venture agreement to establish an aluminium smelter and a 1250 MW power plant at a cost of $4 billion in South Sumatra. The Adani Group has signed a Head of Agreement with Bukit Asam, a State coal mining company for constructing and operating a 200-km railway line and a port in South Sumatra. The project is worth $1.6 billion. The Anil Ambani Group has acquired three coal mines and will construct a 233-km railway line and port in the Jambi and South Sumatra Provinces in South Sumatra. The project is estimated at $2 billion. Approximately 12-14 business deals are expected to be signed during the State visit of President Yudhoyono covering Indian investment in natural resources, infrastructure and services in Indonesia.

India shares maritime boundary with Indonesia. Both India and Indonesia are members of the 18-nation Indian Ocean Rim – Association for Regional Cooperation (IOR-ARC). The entry point to Straits of Malacca is of crucial importance to worldwide shipping and more than 50,000 vessels transit through this route in a year. This point not only controls access to northern Bay of Bengal but also further to Pacific Ocean.

In the light of maritime security India has very intensive cooperation with Indonesia in the field of naval patrolling, bilateral exercises both with the Navy and also Coastguards. The Indian Ocean Naval Symposium (IONS) initiative launched by Indian Navy has provided forward looking framework for constructive engagements among the navies of the region. Under the regional security cooperation and dialogue forum — ASEAN Regional Forum (ARF) — India has contributed to the discussions on maritime security. ARF has 27 member countries which includes 10 ASEAN members including Indonesia, 10 ASEAN Dialogue Partners including India plus seven other countries.

Indonesia is India’s strategic partner. During the last visit of President Yudhoyono in November 2005, the relationship between the two countries was elevated to the level of new strategic partnership. In June 2007, during the India-Indonesia Joint Commission Meeting at Jakarta, the Foreign Ministers of the two countries concluded an Action Plan to infuse the partnership with greater content and vigour. A bilateral defence cooperation agreement was signed between the two countries in June 2001. The last meeting of the Joint defence Cooperation Committee at Defence Secretary level was held in New Delhi in June 2010.

Both countries have cooperated with each other in a number of international and regional fora and groupings like G20, NAM, the Asia Europe Meeting (ASEM), ASEAN, ARF, East Asia Summit and IOR-.ARC. Indonesia is the Chair of ASEAN from January 1, this year. Indonesia had lent valuable support in the finalization of the India-ASEAN FTA. The India-ASEAN FTA in goods has already been operationalised with Malaysia, Singapore, Thailand, Vietnam, Myanmar, Brunei and Indonesia. Indonesia had formally approved the agreement and it has been operationalised with Indonesia with effect from October 1, 2010. Other ASEAN member countries in the process of ratifying the FTA.

A similar agreement on trade-in-services and investment is expected to be concluded by March 2011. The joint study for initiating negotiations on a Comprehensive Economic Partnership Agreement (CEPA) between India and ASEAN has been completed.

Indonesia is India’s third largest trading partner in the ASEAN. India-Indonesia bilateral trade was $11.7 billion in 2009-10. India is Indonesia’s largest buyer of crude palm oil (CPO) and an importer of its minerals particularly coal and copper ore, petroleum, paper, pulp and textiles.

India and Indonesia have shared two millennia of close cultural and commercial contacts. Substantial number of people of Indian origin have settled since millions of years, particularly in Bali. During respective struggles for independence, the national leaderships of India and Indonesia led by Jawaharlal Nehru and President Sukarno collaborated closely in supporting the cause of Asian and African independence and later after the two countries became independent, together Prime Minister Nehru and President Sukarno laid the foundation of the Afro-Asian and Non-Aligned Movements at the Bandung Conference in 1955. There is an active cultural exchanges between the two countries. The focal points for this exchange are the two Indian Cultural Centres established in Jakarta and Bali. The Cultural Centres organized a ‘Festival of India’ in Indonesia in the period October to December 2009.