Trade

Indonesia-GCC trade talks start in Jakarta

September 10, 2024, 12:58 PM

Motorcyclists riding in Jakarta last month to celebrate the 79th anniversary of Indonesia's Independence. GCC investments in the country are worth $25m

FTA negotiations formerly open
2022 trade worth $16bn
GCC talks with Turkey continue

The GCC has formally opened negotiations with Indonesia over a free trade agreement.

The bloc of six – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – started the trade talks in Jakarta on Monday.

Total trade between Indonesia and the GCC in 2022 was $16 billion. The amount of investments from the Gulf into the world’s largest archipelagic state reached $25 million, predominantly from Saudi Arabia, Kuwait and the UAE, according to the most recent figures from Indonesia’s Ministry of Foreign Affairs.

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The ministry added that the scope of talks includes exports, investment, counter-terrorism cooperation, cooperation on health issues and political support for Palestine.

Indonesia and the UAE signed a comprehensive economic partnership agreement (Cepa) in 2022, which, at the time, was predicted to boost bilateral trade to more than $10 billion annually by 2027.

Meanwhile, the GCC is progressing talks with Turkey to create one of the world’s largest free trade areas worth $2.4 trillion, while negotiations for deals with China, New Zealand and the UK are ongoing.

A framework agreement on economic cooperation between India and the GCC was signed in August. This included looking into the possibility of restarting FTA negotiations, which began in 2006.

GCC-Indonesia trade highlights

In August, Saudi Arabia’s Acwa Power signed a power purchase agreement (PPA) with Indonesia’s state-owned electricity utility PT Perusahaan Listrik Negara (Persero) for the 60 megawatt Saguling floating solar PV project.
Eagle Hills, the Abu Dhabi developer, signed a tentative agreement in July with the Indonesian government to develop $3 billion worth of tourism assets in the country.
A wholly owned subsidiary of Abu Dhabi Investment Authority in January invested in Indonesia’s Trans Java Toll Roads, partnering with Dutch pension fund APG Asset Management and Indonesia’s sovereign wealth fund Indonesia Investment Authority.
Abu Dhabi clean energy company Masdar invested in Pertamina Geothermal Energy, based in Jakarta, in February 2023. PGE is one of the biggest companies in Indonesia’s geothermal energy sector, which is the second largest in the world (behind the US).
Saudi Arabia’s Ades Holding Company signed a long-term SAR803 million ($214 million) Java Sea drilling contract with Pertamina Drilling Services Indonesia in January this year.