TEMPO.CO, Jakarta - The escalating conflict between India and Pakistan has raised concerns about its impact on Indonesia's trade. Both countries in South Asia are Indonesia's trading partners.
The armed conflict between India and Pakistan intensified on May 7, 2025, after India launched missile attacks on several areas in Pakistan's Kashmir. Lieutenant General Ahmed Sharif Chaudhry, the Pakistani Military Spokesperson, confirmed to Al Jazeera that Indian missiles hit four locations in Punjab and two areas in the Pakistani-controlled Kashmir. The attack occurred around 01.00 local time on Wednesday, May 7, 2025.
According to the Ministry of Trade data, Indonesia's trade balance with both countries remains surplus. Indonesia's trade balance with India in 2024 was a surplus of US$14.67 billion. Indonesia's exports in 2024 reached US$20.33 billion, while imports were US$5.66 billion. The Trade Ministry recorded Indonesia's exports to India as coal, palm oil, steel, copper ore, and jewelry.
Indonesia's trade balance with Pakistan remained surplus in 2024, amounting to US$2.9 billion. BPS data shows that Indonesia's exports to Pakistan in 2023 were worth US$3.5 billion, while imports from Pakistan amounted to US$621 million.
Indonesia's trade relations with both countries are warm. Indonesia marked this relationship with President Prabowo Subianto's visit to India in January 2025. As reported by Antara on February 19, 2025, Prabowo was an honored guest on the Republic Day of India.
The cooperation between the two countries has been further strengthened by signing five memoranda of understanding (MoUs) in various sectors such as health cooperation, traditional medicine quality control, digital technology development, maritime safety and security, and cultural exchange.
Although Prabowo did not continue his journey to Pakistan, Indonesia's trade relations with Pakistan are quite good. "I am confident that the strong relationship between Indonesia and Pakistan will continue to grow, mutually beneficial and prosperous," said Minister of Trade Budi Santoso during the 85th National Day of Pakistan and the 75th Bilateral Relationship between Indonesia and Pakistan in Jakarta on Monday, April 28, 2025.
Budi expressed his delight in seeing Pakistan emerge as one of Indonesia's main trading partners in the South Asian region. He noted that bilateral trade showed a positive trend of 7.92 percent over the past five years, encompassing products such as palm oil, textiles, machinery, pharmaceuticals, and halal food products.
The Preferential Trade Agreement (PTA) between Indonesia and Pakistan, which began in 2012, has increased the trade value from US$1.6 billion to US$4 billion in 2024. Currently, the two countries are negotiating to elevate the PTA to a Trade in Goods Agreement (TIGA) to expand the scope of sectors, such as agriculture, Islamic finance, digital innovation, and sustainable trade. "Both countries have agreed to expand the partnership coverage by elevating the PTA to the Trade in Goods Agreement (TIGA), which is currently under negotiation," Budi said.
Rizki Dewi Ayu contributed to the writing of this article
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