Indonesia and India Business Strategies on Global Value Chain (GVC) Participation
Kumara Jati (a). Aziza Rahmaniar Salam (b). Dian Dwi Laksani (c). Rizky Eka Putri (d). Ridho Meyrandoyo Hastjarjo (e). Bambang Sumarjono (f).
(a)Indonesian Trade Promotion Center-Chennai-India, Ministry of Trade of Republic of Indonesia.
kumara_jati[at]yahoo.com.
(b)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
zizasalam[at]gmail.com.
(c)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
dian.laksani[at]yahoo.com
(d)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
rep.ci2e[at]gmail.com
(e)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
ridho.meyrandoyo[at]gmail.com
(f)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
b.sumarjono[at]yahoo.com
Abstract
Indonesia and India are two countries that have direct maritime borders. In 2019, the two countries celebrate 70 years of diplomatic relations. The two governments are also determined to increase the business opportunities, prosperity and improve the economy. The inter-sectoral linkages can provide a better understanding regarding the Global Value Chain (GVC) participation of two countries. The Input-Output Table Analysis found that bilateral trade of two countries was dominated by intermediate input commodities (Indonesia 94% and India 85%). Both countries have to increase the value added of export commodities, to strengthen the Global Value Chain (GVC) participation. The deregulation and debureaucratization of certain regulations is one of the business strategies to increase the bilateral trade of both countries. Indonesia and India bilateral trade analysis show that from 2014-2018 there was a trend of increasing trade by 5.13%, but in 2018 there was a decline in non-oil and gas exports from Indonesia to India, one of which was an increase in palm oil rates. There needs to be a diversification of export products from intermediate input commodity to final products commodity whose trade barriers are relatively low.
Keywords: Indonesia and India, Business Strategies, Global Value Chain (GVC), Input-Output Analysis, Bilateral Trade Analysis
Topic: Business Strategies on GVC Participation