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MEMORANDUM OF UNDERSTANDING
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF INDIA
ON THE ESTABLISHMENT OF
A JOINT STUDY GROUP
TO EXAMINE THE FEASIBILITY OF
COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT
(CECA)

The Government of the Republic of Indonesia and the Government of the
Republic of India hereinafter referred to as "Parties";
Recognizing the role of Comprehensive Economic Cooperation Agreement
in accelerating overall economic development of their respective countries;
Desiring to further expand and develop bilateral relations and cooperation in
the fields of trade, industry, investment and other economic fields;
Pursuant to the Joint Declaration of the President of Indonesia and the Prime
Minister of India of 23rd November 2005;
Bearing in mind the Record of Discussion of Bilateral Meeting between the
Government of the Republic of Indonesia and the Government of the

Republic of India, held in New Delhi on gth August 2005;
Pursuant to the prevailing laws and regulations in their respective countries;
Have agreed as follows :

ARTICLE!

The Parties shall establish a Joint Study Group (JSG) to examine the
feasibility of a bilateral Comprehensive Economic Cooperation Agreement
(CECA) that would include bilateral Free Trade Area (FTA) as a long-term
objective.

ARTICLE2

The objectives of CECA could be to:
1. Broaden and deepen coop·eration in all economic fields;
2. Encourage trade and investment flows, bilaterally and regionally;
3. Contribute to trade and investment facilitation through minimizing tariff
and non-tariff obstacles, reducing any administrative costs;
4. Improve business climate in two countries;
5. Promote transparency of regulation through cooperation among relevant

institutions.

ARTICLE 3
COMPOSITION OF THE JOINT STUDY GROUP

The Joint Study Group will comprise delegations of both sides consisting of
government officials, as well as representatives from the private sector and
academia. The composition of the delegation shall be decided by each Party.
The Joint Study Group shall be co-chaired by the Secretary General,
Department of Trade, Government of Indonesia and Secretary, Department
of Commerce, Government of India and or their representatives.

ARTICLE 4
TERMS OF REFERENCE OF THE JOINT STUDY GROUP

The Terms of Reference of the Joint Study Group would be to:
(i)

identify the strategic and economic benefits that Indonesia and
India can derive from the establishment of CECA;

(ii)

develop a policy framework for enhancing trade in goods,
services and investment including the feasibility of a Free
Trade Agreement in Goods;

(iii)

review the existing institutional framework, infrastructure and
mechanisms in bilateral trade and economic relations to
enhance closer cooperation and recommend measures to
facilitate and optimise such cooperation;

(iv)

expedite the expansion of trade in services, progressively
liberalise trade in services on a preferential basis with
substantial sectoral coverage;

(v)

evolve appropriate framework and modalities for investment
cooperation with a view to creating a favourable climate for
encouraging investment flows across border;

(vi)

enhance economic and technical cooperation in areas of mutual
interest such as financial services, information and
c01rununication technology, bio-technology, bio-energy,
pharmaceutical, healthcare, education and human resource
development (HRD), infrastructure and tourism; and

(vii)

subject to the feasibility for a CECA being established by the
Joint Study Group, to develop a Framework Agreement for
consideration and announcement by their Leaders possibly by
end of 2006.

ARTICLE 5
TIMEFRAME

The meetings of the Joint Study Group shall be held alternately in
Indonesia and India. The Joint Study Group shall submit its report within
12 (twelve) months of its constitution.

ARTICLE6

This Memorandum of Understanding may be amended as and when
required by mutual consent of the Parties.

This Memorandum of Understanding shall enter into force on the date of
its signing and remain in force indefinitely unless either Pa11y notifies the
other of its intention to terminate it by giving 6 (six) month's advance
notice.
IN WITNESS THEREOF, the
Memorandum of Understanding.

undersigned,

have

signed

this

DONE in duplicate in New Delhi on the twenty third day of November
2005.

For the Government of the
Republic of Indonesia

Signed
Mari Elka Pangestu
Minister of Trade

For the Government of the
Republic of India

Signed
Kamal Nath
Minister of Commerce
and Industry