Indonesia-India discuss proposal to create Preferential Trade Agreement

Indonesian Trade Minister Budi Santoso met with Indian Minister of Commerce and Industry Piyush Goyal, and discussed steps to enhance bilateral trade relations by accelerating trade cooperation, enhancing market access, and bolstering investment between the two nations.

Santoso described India as a strategic trade partner in South Asia with immense potential. "Indonesia supports the creation of trade that is increasingly open, facilitative, and mutually beneficial, thereby driving growth in trade and investment between the two nations," the Indonesian minister noted in a statement on Saturday.

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In the meeting held on the sidelines of the BRICS Trade Ministers' Meeting in Jaipur, on August 7, the two ministers discussed the implementation of the Indonesia-India Working Group on Trade and Investment (WGTI).

The two countries also discussed progress on the review of the ASEAN-India Trade in Goods Agreement (AITIGA), where Indonesia reaffirmed its support for the target of concluding negotiations by 2026, while prioritizing simpler, business-friendly outcomes that can facilitate trade more effectively.

According to Santoso, Indonesia is committed to meeting the 80 percent market access liberalization target agreed upon during the AITIGA Review negotiations. This figure represents a significant increase from Indonesia's current liberalization level of 41.9 percent.

As of July 2026, Indonesia has submitted phased market access offers covering approximately 57 percent of that target.

Indonesia has also appreciated India's positive response to the proposal to establish an Indonesia-India Preferential Trade Agreement. This bilateral trade agreement will complement AITIGA by providing broader market access, reducing non-tariff barriers, and strengthening trade facilitation.

In the first six months of 2026, total trade between the two countries reached US$11.89 billion, with Indonesian exports totalling US$9.28 billion and imports amounting to US$2.60 billion. During this period, Indonesia recorded a trade surplus of US$6.68 billion with India.

Meanwhile, total trade between the two nations in 2025 stood at US$23.13 billion, with Indonesian exports amounting to US$18.30 billion and imports at US$4.84 billion, resulting in a surplus of US$13.46 billion for Indonesia.

Indonesia's key exports to India include coal, palm oil, stainless steel, industrial monocarboxylic fatty acids, and artificial corundum.

On the import side, Indonesia sources buffalo meat, peanuts, goods transport vehicles, tractor parts and accessories, and raw tobacco from India.