• India and Indonesia continue to be important partners both in terms of trade and politics
    • The two countries are reliant on each other’s products in order to meet the demands of their local population
    • For example, Indonesia is among the largest producers of coal and other natural resource
      • However, the country does not have the local manufacturing capabilities needed to cater to the high demand
      • Therefore, the country imports machinery and other mining equipment from nations such as China and India
  • During the year 2019, Indonesia imported machinery and related equipment worth $632 million from India
    • This category of products was Indonesia’s largest import from India
    • These figures clearly indicate that mining equipment from India plays a vital role in the Indonesian economy
  • This blog discusses the key aspects related to the export of mining equipment from India to Indonesia

Export of Mining Equipment from India to Indonesia

  • Indonesia is a rapidly-growing economy. In recent years, the country has recorded Gross Domestic Product (GDP) growth rates in excess of 5% per annum
    • This rapid growth has been boosted by a rapidly growing population and the high demand for Indonesia’s natural resources around the world
    • At present, Indonesia is the fourth most populous nation in the world. The country now boasts of a growing middle classes
    • Indonesia continues to be a major exporter of natural resources including different types of coal
    • However, the country still lags behind in terms of the mining infrastructure
    • There have been numerous instances where Indonesia’s mines have operated at below-average capacity due to a lack of resources
  • In order to deal with these challenges and meet the demand for mining equipment, Indonesian traders are increasingly looking at overseas markets
    • China and India are among the leading exporters of machinery and related equipment around the world
    • In recent years, the balance of power has shifted from China to India, especially in the Indonesian market for mining equipment
  • Another important factor is that Indonesia wants to increase its import of coalAnother reason why India’s imports from China are declining is that there has been a slowdown in Chinese factories
    • This increase can only be achieved if the country is able to procure sufficient amounts of mining equipment from countries like India
    • India and Indonesia have historical trade relations, and the two countries also enjoy strong political relations
  • In the near future, it is likely that India’s mining equipment will play an even more important role in Indonesia’s development
    • India is looking to increase its exports across industries, and Indonesia presents a major opportunity to the South Asian nation
    • India also purchases coal from Indonesia from time to time. This means that equipment exported from India to Indonesia becomes even more important for it
    • If India does indeed increase the exports of mining equipment in the future, such a scenario could be a win-win situation for both the countries

To conclude, it is clear that India and Indonesia are important trade partners for each other. Mining equipment is continually being exported from India to Indonesia. Institutions such as Euro Exim Bank offer customized support to traders in the form of financial instruments and bespoke trade advisory services. Euro Exim Bank offers financial instruments such as Bank Guarantees and Letters of Credit (LCs). Further information about Euro Exim Bank and its key product offerings is available here.

To conclude, it is clear that India’s exports to China are rising on a consistent basis. Institutions such as Euro Exim Bank offer customized support to traders in the form of financial instruments and bespoke trade advisory services. Euro Exim Bank offers financial instruments such as Bank Guarantees and Letters of Credit (LCs). Further information about Euro Exim Bank and its key product offerings is available here