Bilateral trade between Pakistan and Indonesia reached a record $4.7 billion in the fiscal year 2024–25, showing a 40% growth from $3.36 billion in FY2023. This sharp increase highlights strengthening economic ties between the two nations. Both countries are currently in advanced negotiations for a Free Trade Agreement (FTA) aimed at expanding market access and boosting long-term cooperation.
Indonesia, the largest economy in Southeast Asia, remains one of Pakistan’s most important trading partners. Pakistan exports various goods including halal meat, seafood, IT services, textiles, sports goods, and pharmaceuticals. In return, Pakistan imports key products from Indonesia such as palm oil, coal, rubber, consumer electronics, spices, tea, and nickel-based products. Palm oil continues to be Pakistan’s largest import from Indonesia.
The foundation for this growing trade was laid in 2012 when the two countries signed a Preferential Trade Agreement (PTA), which came into effect in 2013. The PTA offered tariff concessions and improved market access for both sides. The proposed FTA is now expected to build on this by including more products and addressing trade barriers.
Notably, the FTA talks also include strategic sectors like electric vehicle battery production. Indonesia’s rich reserves of nickel—a key component in EV batteries—can offer Pakistan valuable entry into this fast-growing market. Other potential areas for expanded cooperation include energy, healthcare, tourism, education, IT, and defense.
Business leaders in Pakistan see Indonesia as a gateway to the larger ASEAN market, which consists of over 600 million consumers. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) stressed the importance of this relationship, highlighting Indonesia’s role in helping Pakistan diversify trade and increase its economic footprint in Southeast Asia.