Russia-Indonesia Free Trade Agreement To Reduce 93% Of All Traded Goods Duties To Zero

Russian Deputy Industry and Trade Minister Roman Chekushov has said that the proposed Eurasian Economic Union free trade agreement with Indonesia has seen an initial preliminary agreement signed in St. Petersburg, with plans to sign the full agreement with the participation of all Eurasian Economic Union (EAEU) countries by the end of this year. He was speaking at a meeting of the State Council committee for the International Cooperation and Export national project.

Chekushov said that the FTA agreement would apply to around 93% of all mutually traded goods, saying that “This means that 93% of the whole range of goods will be subject to duty-free trade.”

The Eurasian Economic Union (EAEU) includes Russia as well as Armenia, Belarus, Kazakhstan, and Kyrgyzstan. While Russia is the largest EAEU member and market, Indonesia will also be looking to increase trade with Kazakhstan and Kyrgyzstan in particular, as they are traditional Islamic markets.

According to materials from the Industry and Trade Ministry, the signing of the FTA with Indonesia will boost Russia’s industrial exports by US$200 million and agricultural exports by US$100 million. The agreement will cover 98% of Russian exports to Indonesia.

The list of goods covered by the agreement includes fertilizers, automotive products, timber processing goods (panel products, paper, and furniture), tires, and other manufactured goods.

Russia’s Foreign Minister, Sergey Lavrov, met with Indonesian Foreign Minister Sugiono earlier this week, with both sides expressing the intent to boost bilateral trade.

Indonesia’s digital economy is among the fastest growing in Southeast Asia, projected to exceed US$130 billion in value by 2025. Indonesia also has the world’s fifth-highest number of internet users and is a full member of the BRICS group.

Indonesia has a population of 275.7 million. In 2024 the national GDP (PPP) reached US$4.658 trillion with a GDP growth rate of 5.3%. GDP (PPP) per capita stands at US$19,844.

Russia-Indonesia bilateral trade has been increasing and rose from US$3.3 billion in 2021 to US$4 billion in 2024. Russian tourism to the country is increasing, while several Russian manufacturers, including Kamaz, are operational in Indonesia. Russia’s Softline, a prominent, Moscow-based, publicly traded IT developer, is opening a new office in Indonesia to promote its products and services, in addition to providing vendor solutions. It sees its expert knowledge as a good match for the development potential in Indonesia.

The overall bilateral trade dynamics are highly positive, and especially so with the EAEU Free Trade Agreement coming into effect. Businesses from within the EAEU should be conducting market research activities to establish what products can be sold onto this important consumer market.