Indonesia has agreed to immediately increase Indian imports of buffalo meat, sugar and auto parts after India boosted purchases of Indonesian palm oil amid a spat with rival supplier Malaysia, two Indian government sources with direct knowledge of the matter told Reuters on Friday.
Indonesia and Malaysia together account for 85% of palm oil and India is the biggest buyer of edible oil.
Earlier, in January, Malaysia accused recent Indian polices of discrimination against Muslims after which the country effectively halted imports of refined palm oil.
Indonesia, the world’s biggest palm oil producer and exporter, has reaped maximum benefits from the spat and sold its crude palm oil at a premium after India restrain import from Malaysia.
The trade ministers of India and Indonesia at their meeting on Friday in Davos agreed to further boost trade between the two countries in order to double their bilateral trade to $50 billion by 2025, said one of the sources.
Talking on the same, one of the sources said, “This is a goal we agreed upon earlier, now the process accelerates.”
“Starting now, they have promised that they will buy a lot more meat, a lot more sugar and autos/autoparts. Palm oil imports from Indonesia will increase and there are many areas where we will export more.” He added.
Reuter reported that as per an Indian government document, Indonesia had “informally agreed” to double the annual quota for Indian bovine meat exports to 200,000 tonnes.
In the last FY, the countries trade was worth $21.2 billion out which $15.84 billion comprises of Indian purchases. To further enhance the trade between the two countries Indonesian Trade Minister Agus Suparmanto is likely to visit India next month.
Indonesia imported 94,500 tonnes of Indian buffalo meat worth $323 million in the 2018/19 fiscal year. It is the third biggest buyer of Indian buffalo meat after Vietnam and Malaysia. Indonesia, however, bought only 555 tonnes of sugar from India last fiscal year.
One of the sources informed, “They have now changed some of their norms to let more Indian sugar come in. In other areas, there’s an ongoing process of discussion on easing regulations or standards, or increasing quotas in these areas.”
Malaysia’s top sugar refinery on Thursday informed Reuters that it is likely to increase the purchase of refined sugar from India as an effort to conciliate the country amid the palm oil spat.