Indonesian President Visits Hanoi to Talk Trade and Investment

The President of Indonesia was in Hanoi over the weekend meeting with high-level officials to talk trade and investment. Here’s how trade between Indonesia and Vietnam looks moving into the new year.

The President of Indonesia Joko Widodo met with Vietnam’s Prime Minister Pham Minh Chinh over the weekend in Hanoi where the two leaders discussed the two countries’ ongoing economic engagement.

Widodo told his counterpart that Indonesia was looking for investment from Vietnamese businesses, particularly in its new capital city. He also suggested greater engagement in electric vehicles, tourism, and banking and finance among several other industries.

Pham, on the other hand, pushed for Indonesia’s support in developing Vietnam’s halal foods industry. This has long been a goal for Vietnam with similar support sought from Malaysia and the United Arab Emirates last year (see also: Halal Food Market in Vietnam Small, but Huge Export Opportunity).

Furthermore, the two leaders discussed greater regional integration and collaboration. In particular, in terms of trade, they agreed to work toward reaching US$18 billion in two-way trade by 2028. It’s with this in mind, that the Vietnam Briefing provides this brief overview of the current state of trade between Indonesia and Vietnam.

Trade relations between Indonesia and Vietnam

Both members of the Association of Southeast Asian Nations (ASEAN) trade between Indonesia and Vietnam is covered by several free trade agreements. These include:

• ASEAN Trade in Goods Agreement (ATIGA)
• ASEAN-China Free Trade Area
• ASEAN-Japan Comprehensive Economic Partnership
• ASEAN-Korea Free Trade Area
• ASEAN-Australia-New Zealand Free Trade Area
• ASEAN-India Free Trade Area
• ASEAN-Hong Kong, China Free Trade Area (AHKFTA)
• Regional Comprehensive Economic Partnership

See also: Vietnam’s Free Trade Agreements – Opportunities for Your Business

Exports Indonesia to Vietnam

In 2023, Indonesia exported US$8.73 billion worth of goods to Vietnam. The biggest individual items were: coal; iron and steel; and animal and vegetable fats and oils. These three categories alone accounted for US$3.87 billion worth of exports from Indonesia to Vietnam.

Indonesia’s exports to Vietnam, 2022

Source: General Department of Customs

Exports Vietnam to Indonesia

In 2023, Vietnam exported US$5.07 billion worth of goods to Indonesia. The three biggest exports from Vietnam to Indonesia were: rice; iron and steel; and machine equipment, tools, and instruments. Collectively the dollar value of these three exports totaled US$1.5 billion.

Vietnam’s exports to Indonesia, 2022

Source: General Department of Customs

Indonesia-Vietnam trade moving forward

With two-way trade in 2023 totaling more than US$13.8 billion, there is still a way to go for trade between Vietnam and Indonesia to reach the US$18 billion goal the two countries are aiming for. That said, as the ASEAN trading bloc becomes more heavily integrated and supply chains become increasingly more diversified, achieving this goal becomes increasingly more likely.

To find out more about building regional supply chains in Southeast Asia contact the business advisory experts at Dezan Shira and Associates.

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