TaMo, M&M deal in Indonesia falters

Local think tank projects a $2.3-bn hit to Jakarta's GDP

- GEETA NAIR & AKBAR MERCHANT

INDONESIA'S PLAN TO import 105,000 pickup trucks and light commercial vehicles from Tata Motors and Mahindra & Mahindra for its flagship rural cooperative programme has triggered a wave of domestic opposition, with industry bodies and economists urging President Prabowo Subianto to reconsider the move.

The proposed procurement of Indonesian Rupiah (Rp) 25 trillion ($1.5 billion) - among the largest global supply contracts won by the two Indian automakers - is meant to bolster the government’s Koperasi Merah Putih initiative to strengthen rural logistics and food supply chains. State-owned Agrinas Pangan Nusantara has placed orders for 35,000 four-wheel-drive pickups and 35,000 six-wheel trucks each from Tata and Mahindra, with deliveries scheduled through 2026.