Pakistan, Indonesia Set To Sign 10 MoUs, Explore Free Trade Agreement

Indonesia and Pakistan to sign 10 MoUs, explore FTA, and strengthen trade ties in EVs, palm oil, IT, and healthcare. [Image via The Express Tribune]

KARACHI: More than 10 memoranda of understanding (MoUs) and agreements are likely to be signed between the two brotherly countries Indonesia and Pakistan soon, according to well-placed diplomatic and Foreign Office sources.

Both sides will also engage in talks to make progress on a free trade agreement (FTA) to further strengthen economic ties.

When it comes to high-potential sectors for trade growth, Pakistan may focus on processed food, pharmaceuticals, IT services and halal meat while consumer electronics, auto parts and processed palm-based products are far better in Indonesia.

In 2023, Pakistan exported goods worth approximately $328.16 million to Indonesia. Indonesia’s exports to Pakistan were valued at around $3.03 billion. Indonesia produces nearly half of the world’s refined nickel and two-thirds of the mined nickel; therefore, it intends to achieve a more prominent place in the world’s electric vehicle (EV) supply chain.

The Southeast Asian nation is striving hard to capture and discover new markets in Asia and Central Asia, especially for lithium batteries and EVs.

Heavy reliance of Indonesia on nickel for batteries due to its vast nickel reserves provides it a comparative advantage in terms of consumer affordability, durability, better thermal stability and higher energy density. Thus, a joint venture for lithium batteries would be a value addition for both countries.

Moreover, Indonesia’s EV economy is rapidly emerging, which has healthy and bright prospects, qualifying it to become a global leader in EV production.

“Most of the Indonesian EV makers are private companies, which should be a comfort zone for us to have mutually benefitting joint ventures in the days to come,” economic strategist and regional expert Dr Mehmoodul Hassan Khan said.

Also See: Visit of Indonesian President Prabowo Subianto to Pakistan Postponed

Indonesian President Prabowo Subianto was scheduled to embark on his maiden official visit to Pakistan from January 26 to 28. It has been delayed and will be rescheduled soon.

It is predicted that collaboration in education, health care, information technology, tourism, energy and food, and military ties will be discussed and finalised during the expected visit.

Indonesia is among the “leading” trading partners of Pakistan. It is the largest economy in Southeast Asia and is a diverse archipelago nation of more than 300 ethnic groups. It has had constant impressive economic growth since overcoming the Asian financial crisis in the late 1990s.

“Indonesia’s macro-economy is stable, sustainable and diversified, which can assist us in diverse sectors of the economy including textile, Islamic fashion products, Islamic tourism, Islamic banking, startups, metal & mining, education, biodiesel, renewables, small and medium-sized enterprises (SMEs), digitalisation, e-commerce, engineering and biotech and palm oil production,” Khan said.

The imported palm oil waste may also be converted into finished products locally, could be used in agriculture, chicken feed, organic fertiliser, etc and contribute to the economy of local people, industries and businesses. Since edible oil constitutes the second-largest import bill in Pakistan after petroleum products, it is suggested that both countries must jointly work on growing palm oil trees to produce the fruit and edible oil locally, meet domestic demand and reduce over 90% dependency on other countries. Thus, indigenous production is the only sustainable solution.

The government with the help of Indonesian government must seriously focus on local palm oil plantations without delay in the coastal belt of Sindh and Balochistan. “Around one million metric tons of palm oil has been produced locally in Sindh and Punjab over the past two decades. We must work harder to boost the output. The coastal belt of Sindh and Balochistan is highly suitable for producing palm oil,” Khan said.

This news is sourced from The Express Tribune and is intended for informational purposes only.

News Desk

Your trusted source for insightful journalism. Stay informed with our compelling coverage of global affairs, business, technology, and more.

Recent

A Strategic Checkmate: The Defense Pact Reshaping the International Relations

A Strategic Checkmate: The Defense Pact Reshaping the International Relations

The 2025 strategic defense pact between Pakistan and Saudi Arabia marks a major diplomatic milestone. Strengthening military and economic ties, it enhances Pakistan’s regional influence, bolsters Gulf security, and positions Islamabad as a key player between China, the US, and the Middle East. The agreement reflects a blend of constructivist and realist strategies, reinforcing Pakistan’s leadership role in the Muslim world.

Read More »
Anatomy of a Diplomatic Failure: The 20-Point Gaza Plan

Anatomy of a Diplomatic Failure: The 20-Point Gaza Plan

A 20-point Gaza peace plan, initially hailed by a coalition of eight Muslim-majority nations, represented a rare moment of consensus in Middle East diplomacy. But this optimism was short-lived. Following a pivotal meeting between US and Israeli leaders, the plan was radically altered, transforming a multilateral framework into a security-centric arrangement that alienated its initial backers and triggered a crisis of trust. This is the story of how a potential breakthrough unraveled into a diplomatic failure.

Read More »
Nepal’s Counter-Revolt: Challenge for the Communist and the Left in South Asia

Nepal’s Counter-Revolt: Challenge for the Communist and the Left in South Asia

Nepal’s counter-revolt exposes decades of political betrayal by mainstream and leftist parties alike. Despite revolutionary promises to abolish feudalism, ensure sovereignty, and deliver land reforms, leaders from Congress to Maoists succumbed to corruption and power politics. Today’s uprising is both a rejection of failed communist leadership and a warning for the Left in South Asia.

Read More »
Deconstructing Leadership in modern times.

Deconstructing Leadership in Modern Times.

Deconstructing leadership in modern times requires exploring the wisdom of Plato, Machiavelli, and Confucius alongside modern thinkers like John Maxwell and Ronald Heifetz. Loyalty, empathy, innovation, and purpose emerge as essential traits, shaping transformational leaders for a rapidly changing and unequal world.

Read More »