Indonesia’s trade is anchored in its role as one of the world’s largest commodity exporters, supplying markets with coal, palm oil, natural gas, and rubber.
These resources form the backbone of its export earnings and tie the country closely to demand cycles in China, India, and other major economies.
The government has increasingly sought to balance raw commodity exports with efforts to expand downstream processing, aiming to capture more value domestically.
On the import side, Indonesia relies heavily on industrial inputs such as machinery, chemicals, and refined fuels to support its manufacturing and infrastructure sectors.
Consumer goods and foodstuffs also make up a significant share of imports, reflecting rising middle-class demand.
Trade dynamics often fluctuate with global energy and commodity prices, as well as currency shifts, which influence both the competitiveness of exports and the cost of imports.
Trade policy in Indonesia has become more assertive, with restrictions on raw mineral exports and incentives for investment in domestic refining and manufacturing.
These measures are intended to move the country up the value chain and reduce dependence on volatile commodity markets.
At the same time, Indonesia remains committed to regional trade frameworks, such as ASEAN, while navigating broader global tensions in supply chains and protectionism.
Indonesia free trade agreements
Indonesia has a number of trade agreements in place. These include:
Indonesia–Japan Economic Partnership Agreement (IJEPA)
In force since 2008, IJEPA eliminates tariffs on most goods and supports cooperation in investment, energy, and human resources. It anchors trade in automotive parts, electronics, and agriculture.
Indonesia–Korea Comprehensive Economic Partnership (IK-CEPA)
Launched in 2023, IK-CEPA liberalises most goods and expands cooperation in services, technology, and investment, boosting Indonesian exports of textiles, footwear, and fisheries.
Indonesia–Australia Comprehensive Economic Partnership (IA-CEPA)
Since 2020, IA-CEPA has removed tariffs and opened markets for agriculture, education, and investment, with added provisions for skills mobility and training.
Indonesia–EFTA Comprehensive Economic Partnership (IECEPA)
In effect since 2021, this pact with Switzerland, Norway, Iceland, and Liechtenstein grants Indonesian palm oil and textiles preferential entry while opening access for European industrial and pharmaceutical goods.
Indonesia–Chile Comprehensive Economic Partnership (ICCEPA)
Effective in 2019, ICCEPA removed tariffs on thousands of products, giving Indonesia stronger access for palm oil, textiles, and footwear in Latin America.
Indonesia–Pakistan Preferential Trade Agreement (PTA)
Implemented in 2013, this deal cuts tariffs on palm oil and textiles, with talks ongoing to broaden it into a full FTA.
Indonesia–Mozambique Preferential Trade Agreement
In force since 2022, it reduces tariffs on Indonesian industrial goods and provides Mozambique access for agricultural exports, marking Indonesia’s first African trade pact.
ASEAN Free Trade Area (AFTA) and ASEAN+ FTAs
Through ASEAN, Indonesia benefits from tariff-free regional trade and FTAs with China, Japan, Korea, India, Australia, and New Zealand.
Regional Comprehensive Economic Partnership (RCEP)
Active since 2022, RCEP simplifies rules of origin and broadens access across 15 Asia-Pacific economies, strengthening Indonesia’s role in regional supply chains.
Indonesia–Peru Free Trade Agreement
Signed in 2025, the deal boosts trade in palm oil, coal, and agriculture, expanding Indonesia’s reach in Latin America.
Indonesia–EAEU Free Trade Agreement
Finalised and due for signing in 2025, this pact opens markets for Indonesian palm oil, coffee, and rubber with Russia and its partners.
EU–Indonesia Comprehensive Economic Partnership Agreement (CEPA)
A political deal reached in 2025 sets the stage for a comprehensive FTA covering goods, services, investment, and sustainability with the European Union.
Tariffs and trade barriers
Imports into Indonesia face a range of tariffs and/or trade barriers. These include:
Indonesia’s average tariff rates
Indonesia maintains moderate tariff levels compared to regional peers.
The average applied tariff rate is around 7–8 percent, though duties vary significantly by sector.
Higher rates are imposed on sensitive goods such as agriculture, textiles, and certain manufactured products, while industrial inputs and raw materials often face lower tariffs to support domestic industries.
Non-tariff barriers in Indonesia
Beyond tariffs, Indonesia applies a range of non-tariff measures, including import licensing requirements, quotas, and product standards.
Local content rules, pre-shipment inspections, and complex customs procedures add to compliance costs for foreign businesses.
Restrictions are particularly notable in sectors like food, pharmaceuticals, and automotive, where technical regulations and halal certification requirements can limit market access.
These measures reflect both protectionist policy goals and regulatory priorities such as consumer safety and religious compliance.
Key Indonesia trade bodies
There are a range of bodies and institutions operating in the trade space in Indonesia. These include:
Ministry of Trade (Kemendag)
The Ministry of Trade is the primary government agency overseeing trade policy, negotiations, and regulation. It sets tariff and non-tariff measures, manages licensing, and represents Indonesia in international trade forums and FTA talks.
Indonesia Investment Coordinating Board (BKPM)
Now integrated into the Ministry of Investment, BKPM facilitates foreign and domestic investment linked to trade. It provides approvals, incentives, and support for companies entering Indonesia’s export-oriented sectors.
Indonesian Chamber of Commerce and Industry (KADIN)
KADIN serves as the country’s main business association, representing private sector interests in trade and investment. It acts as a bridge between government and business, giving input on trade policy and market access issues.
Indonesia Export Financing Agency (LPEI/Eximbank)
LPEI provides financial services to support exporters, including credit facilities, guarantees, and insurance. Its role is to strengthen Indonesia’s competitiveness in global markets.
Indonesia ’s top exports
Indonesia’s export profile is dominated by natural resources and commodity-based products.
Coal is the single largest export, with Indonesia ranking among the world’s top suppliers to major energy markets such as China and India.
Palm oil is another cornerstone, reflecting the country’s role as the world’s leading producer, while crude petroleum and liquefied natural gas also contribute significantly to earnings.
In addition to energy and agriculture, metals and minerals form a major part of export revenues.
Nickel, copper, and tin are central to Indonesia’s strategy of expanding downstream industries such as battery production and stainless steel.
Rubber and cocoa further highlight its role as a key global supplier of tropical commodities.
Manufactured goods are increasingly important, with textiles, garments, footwear, and electronics steadily gaining share.
The government’s push to move up the value chain, particularly in electric vehicles and processed minerals, aims to reduce reliance on raw material exports and broaden Indonesia’s industrial base.
Indonesia ’s top imports
Indonesia’s imports are driven by the needs of its manufacturing base and growing consumer market.
Machinery, electrical equipment, and chemicals form a large share, supplying inputs for industrial production, construction, and infrastructure projects.
Refined petroleum products also feature prominently, reflecting Indonesia’s limited refining capacity despite being an oil producer.
Agricultural imports are essential to meet domestic demand.
Wheat, soybeans, dairy, and sugar dominate, as local production cannot fully supply the population.
Rising incomes have also increased demand for processed foods, beverages, and higher-value agricultural products.
Other key imports include iron and steel, plastics, and pharmaceutical products.
These support both industrial activity and healthcare needs.
With a growing middle class, consumer goods such as vehicles and electronics also make up a significant portion of imports, reflecting Indonesia’s evolving consumption patterns.
Regional Comparison
Here is how Indonesia’s trade activity compares to other countries in the region.
Vietnam
Indonesia relies heavily on commodities such as coal, palm oil, and gas, while Vietnam’s exports are dominated by electronics, textiles, and footwear.
Vietnam’s trade-to-GDP ratio is much higher, reflecting its deep integration into global supply chains, whereas Indonesia’s large domestic market reduces its reliance on exports.
See also: Vietnam Trade: Exports, Imports & FTAs
Thailand
Indonesia’s exports are resource-based, while Thailand balances commodities with advanced manufacturing, particularly automobiles and electronics.
Thailand’s agricultural exports like rice and rubber are also more established, giving it a more diversified trade profile than Indonesia.
Learn more about trade in Thailand→
Malaysia
Both countries export palm oil, petroleum, and natural gas, but Malaysia has a stronger electronics and machinery base.
Malaysia’s trade is more open, with a higher share of GDP, while Indonesia is less dependent on external markets.
Singapore
Indonesia supplies raw materials, while Singapore re-exports refined petroleum, electronics, and chemicals.
Singapore’s trade is many times its GDP due to its hub role, while Indonesia’s trade volume is lower relative to its economic size.
Philippines
Indonesia exports energy and agricultural commodities, while the Philippines relies on electronics and agricultural goods like bananas.
The Philippines imports more food and fuel, while Indonesia’s imports are centred on machinery and industrial inputs.
Explore trade in the Philippines→
Laos
Indonesia has a broad global trading network, while Laos is reliant on a few partners, mainly China and Thailand.
Laos depends on electricity and mineral exports, whereas Indonesia has a wider mix of energy, agriculture, and manufactured goods.
Cambodia
Indonesia’s exports span commodities and some manufacturing, while Cambodia is heavily dependent on garments and footwear.
Cambodia’s trade is less diversified and more vulnerable to changes in US and EU demand, while Indonesia has a larger domestic buffer.
FAQ: Trade in Indonesia
These are some commonly asked questions about trade in Indonesia.
Why do so many firms manufacture in Indonesia ?
Firms manufacture in Indonesia due to its abundant labour force, large domestic market, and rich natural resources.
What are Indonesia ’s biggest exports?
Indonesia’s biggest exports are coal, palm oil, natural gas, textiles, and nickel.
What are Indonesia ’s biggest imports?
Indonesia’s biggest imports are machinery, refined petroleum, chemicals, agricultural goods, and consumer products.
What free trade agreements is Indonesia a part of?
Indonesia is part of ASEAN FTAs, RCEP, and bilateral agreements with Japan, Korea, Australia, EFTA, Chile, Pakistan, Mozambique, and recently Peru, with an EU deal underway.
Outlook for Indonesia trade
Indonesia’s trade outlook is shaped by steady domestic growth and efforts to diversify beyond raw commodities.
While global demand uncertainties and weaker commodity prices may weigh on exports, Indonesia’s large domestic market provides some insulation from external shocks.
New trade agreements, particularly with the European Union, are expected to open opportunities for higher-value exports and attract investment in industries such as renewables, semiconductors, and mineral processing.
Partnerships with China and other regional markets will remain central to sustaining growth.
Overall, Indonesia is likely to see stable trade performance with gradual diversification, shifting from heavy reliance on resources toward more manufacturing and value-added sectors.
That said, Southeast Asian economies can be dynamic and change quickly.
With this in mind, the best way to keep up to date with the changing business environment is to make sure to subscribe to the-shiv.