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The Government of the Republic of India and the Government of the Republic of Indonesia 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 Prime Minister of India and the President of Indonesia 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 8th August 2005;
Pursuant to the prevailing laws and regulations in their respective countries;
Have agreed as follows:
ARTICLE 1
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.
ARTICLE 2
The objectives of CECA could be to:
1. Broaden and deepen cooperation 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, Department of Commerce, Government of India and Secretary General, Department of Trade, Government of
Indonesia 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 India and Indonesia 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 communication
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 India and in Indonesia. The Joint Study Group shall submit its
report within 12 (twelve) months of its constitution.
ARTICLE 6
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
Party notifies the other of its intention to terminate it by giving 6(six) month’s advance notice.
New Delhi
November 23, 2005
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