Jaipur: India and Indonesia discussed local-currency transactions, financial-sector cooperation and the development of financial centres during a meeting between Union Finance Minister Nirmala Sitharaman and Indonesia’s Vice Minister of Finance Juda Agung in Jaipur.
The meeting took place on August 12 on the sidelines of the BRICS Finance Ministers and Central Bank Governors meeting.
According to the Finance Ministry, the two sides discussed a range of issues covering financial-sector development and cooperation between the two countries. They also exchanged views on international financial services and the setting up and operation of financial centres.
Local-currency transactions on agenda
The use of local currencies in bilateral transactions was among the key subjects discussed by the two officials.
Local-currency settlement has gained attention among emerging economies as countries look for ways to make cross-border trade and payments more efficient. India has been working with several trading partners on arrangements that can allow trade to be settled using domestic currencies.
However, the meeting between India and Indonesia did not result in the announcement of a new local-currency agreement or a specific implementation timeline.
The discussions indicate that local-currency transactions remain an area of financial cooperation between the two countries.
Financial centres discussed
Sitharaman and Agung also discussed cooperation and knowledge-sharing related to financial centres.
The two sides considered opportunities to exchange experience on the establishment and operation of such centres. International financial centres can provide platforms for financial services, investment and cross-border transactions, subject to the regulatory framework of the respective country.
The discussion comes as India continues to develop its international financial-services ecosystem through GIFT City in Gujarat, while Indonesia is also working to strengthen its financial sector and international financial connections.
India-Indonesia Economic and Financial Dialogue
The officials also reviewed the India-Indonesia Economic and Financial Dialogue and discussed ways to strengthen economic and trade relations.
Sitharaman referred to the recent visit of Prime Minister Narendra Modi to Indonesia and described the relationship between the two countries as entering a “golden era”.
The Finance Ministry said both sides also agreed on the importance of continuing cooperation through multilateral institutions, with India and Indonesia being important partners among the Global South.
BRICS financial cooperation
The meeting took place against the backdrop of wider discussions among BRICS countries on financial cooperation.
BRICS members have been examining ways to improve cross-border payment connectivity and strengthen financial cooperation. RBI Governor Sanjay Malhotra has also said that BRICS countries are discussing the possible linking of fast-payment systems and central bank digital currencies.
These discussions are separate from the India-Indonesia meeting but form part of the broader push among emerging economies to improve cross-border payment infrastructure.
What it means for India
For India, deeper financial cooperation with Indonesia could support bilateral trade and create opportunities for greater use of domestic currencies in cross-border transactions.
The financial-centre discussions are also relevant as India seeks to expand international financial services through GIFT City. Cooperation with Indonesia could provide opportunities for sharing regulatory and institutional experience.
At this stage, however, the discussions should not be interpreted as the announcement of a new bilateral financial agreement. The Finance Ministry’s account focuses on discussions and cooperation rather than a finalised deal.
Aurelius Business View
The India-Indonesia meeting highlights the growing focus on financial cooperation between major emerging economies.
Local-currency transactions, cross-border payment systems and international financial centres are becoming important parts of discussions around trade and financial integration. For India and Indonesia, progress in these areas will depend on regulatory arrangements, financial institutions and actual participation by businesses.
For now, the latest meeting represents another step in strengthening financial and economic ties between the two countries rather than the launch of a new bilateral payment framework.
Disclaimer: This article is for informational purposes only and does not constitute investment, financial or trading advice. Readers should verify information independently and consult a qualified financial adviser before making investment decisions.
