With an eye on mineral resources like coal, India is scaling up its economic ties with Indonesia and the move is being helped by big Indian business houses like the Tatas, Anil Dhirubhai Ambani Group and Aditya Birla Group.

Commerce and industry minister Anand Sharma is leading a big CII delegation, headed by well-known industrialist Vijay R Kirloskar, to develop new linkages with the Indonesian government and industry.

The initiatives include negotiations for a comprehensive free trade agreement aimed at not only liberalising existing bilateral trade of USD 14 billion and taking it up to USD 25 billion by 2015, but securing access for Indian services like education and health in the 250 million people Indonesian market.

"India and Indonesia can do much more in the changing world," Sharma said at a reception hosted by the India-Indonesian Chamber of Commerce last night.

He said while Indian business houses have invested US 20 billion in sectors like steel, power and coal, Indonesia should allow access to Indian pharmaceuticals, which have made a name for themselves in the world market.

Indian drug companies are the second largest receivers of US food and drug administration approvals.

"The Indian generic companies changed the global discourse" and broke the stranglehold of MNCs in the world pharma market, he said.

When it comes to tapping natural resources and the growing market in Indonesia, Indian firms are not lagging behind their competitors. Tata Power has picked up a 30 per cent strategic stake in PT Kaltim Prima Coal and PT Arutmin Indonesia and established coal linkages for its Mundra power project in Gujarat.

Likewise, the Anil Dhirubhai Ambani Group has bought coal assets and is developing the same. The Adanis have also done similar deals in the coal business. Indonesia has emerged as the world's foremost producer and exporter of thermal coal, ahead of Australia, an official said.

"In two-three years, Indonesia will contribute 150 million tonnes of coal to India," said Biren Nanda, India's ambassador to Indonesia.

In 2010, coal shipments from Indonesia to India stood at about 50 million tonnes, which is expected to rise to 70 million tonnes in the current year.

Nanda, who has been in Jakarta for three-and-a-half years, said economic ties between the two countries have seen a sea change in the last few years. Government-to-government talks have been scaled up to ministerial levels from lower level official talks earlier.

With respect to Indian firms doing business in Indonesia, the TVS Group has set up a two-wheeler manufacturing plant, which it wants to leverage for the entire South-East Asian market, a senior group official said.

Kirloskar, who is chairman and managing director of Kirloskar Electric Company, said Indian firms have unique advantages vis-a-vis the competition from China in markets like Indonesia.

"The Chinese cannot do everything. The Chinese have not developed the Nano car, we have developed it," he said.