Vietnam, Indonesia Upgrade Ties to Comprehensive Strategic Partnership: Prospects of Future Economic Collaborations

Vietnam and Indonesia have upgraded their bilateral relations to a Comprehensive Strategic Partnership, marking the 70th anniversary of diplomatic relations with a tightened collaboration for the future. Beyond enhancing the two-way cooperation, the agreement is expected to contribute to the development and prosperity of ASEAN.

Vietnamese Party General Secretary To Lam and Indonesian President Prabowo Subianto formalized this decision in Jakarta on March 10, 2025. During their discussions, Subianto underlined that Vietnam remained an important partner for Indonesia in the region and expressed Indonesia’s desire to strengthen bilateral ties. Likewise, To Lam affirmed the importance of the relationship with Indonesia to Vietnam, as well as the crucial role of Jakarta in the region.

Both leaders expressed satisfaction with the strong Vietnam-Indonesia friendship, particularly since the establishment of their Strategic Partnership in 2013. 

Vietnam-Indonesia Comprehensive Strategic Partnership: Prospect of the bilateral economic ties

A fundamental aspect of the new partnership is the economic relations between the two nations. Both nations have committed to enhancing economic cooperation, eliminating trade barriers, and supporting business operations, particularly in the import and export of agricultural and aquatic products.

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The two leaders agreed to establish favorable conditions for businesses from both countries to invest in each other’s markets, focusing on high-potential sectors like the digital economy, green economy, energy transition, electric vehicle development, e-commerce, smart delivery systems, digital payments, software design, AI-driven technology solutions, and halal-certified products.

Furthermore, they pledged to strengthen collaboration in science and technology, innovation, and information technology, with the goal of forming a digital partnership. The two countries will also enhance cooperation in emerging areas such as the green economy, digital economy, innovation, and digital transformation.

Vietnam-Indonesia two-way trade in 2024

Rapid growth of trade between  2020 and 2024

The Vietnam Trade Office in Indonesia reported that bilateral trade doubled over the last four years, climbing from US$8.07 billion in 2020 to over US$16 billion in 2024.

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Data from Vietnam’s General Department of Customs indicates that the total trade volume between Vietnam and Indonesia in 2024 was US$16.7 billion, reflecting a year-on-year growth of 21.1 percent. In 2024, Vietnam experienced a trade deficit with Indonesia of US$4.33 billion, an increase of US$669 million compared to 2023. Specifically, Vietnam’s exports to Indonesia amounted to US$6.19 billion, which is a 22.2 percent increase, while imports from Indonesia totaled US$10.5 billion, up 20.5 percent.

Notably, Vietnam’s export value growth rate has outpaced that of imports, leading to a gradual decrease in the country’s trade deficit with Indonesia. Between 2021 and 2024, the bilateral trade deficit saw a notable decline, primarily due to faster export growth compared to imports, particularly in 2023 and 2024.

Also read: Indonesia-Vietnam Two Way Trade

Vietnam’s exports to Indonesia

In 2024, Vietnam exported 34 key items to Indonesia, totaling US$5.1 billion. 17 items surpassed US$100 million in turnover, accounting for 83 percent of the total export value.

Vietnam’s key imports from Indonesia

In 2024, Vietnam imported 39 major items from Indonesia. Among those, automobiles, iron and steel, and coal are the three standout products, generating turnover above US$1 billion.

Robust trade in the first two months of 2025

According to data from Vietnam’s General Statistics Office (GSO), the total import-export turnover between Vietnam and Indonesia reached US$2.65 billion in the first two months of 2025, an increase of 14.6 percent compared to the same period last year. Of this total, the export turnover from Vietnam to Indonesia was US$951 million, a decline of 9.8 percent year-on-year, while imports amounted to US$1.7 billion, representing a 35 percent increase year-on-year.

Vietnam-Indonesia trade beyond 2025

During a meeting on March 11, 2025, To Lam and Indonesian President Puan Maharani agreed to enhance economic and trade cooperation between the two countries, aiming to achieve a two-way trade turnover of US$18 billion by 2028.

Strengthening ASEAN economic integration

In his remarks on the upgrade of bilateral relations, Indonesian Ambassador to Vietnam Denny Abdi emphasized that the strengthened partnership would not only yield bilateral benefits but also have a positive impact on the Southeast Asian region, along with other ASEAN member countries.

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Vietnam and Indonesia share competitive advantages that, when leveraged strategically, create opportunities for mutual benefit. Indonesia is currently the largest economy in Southeast Asia and is the only representative from the region in the G20. Meanwhile, Vietnam has established a Free Trade Agreements (FTAs) network with over 60 countries and economies. This strategic positioning has enabled Vietnam to become one of the 40 largest economies worldwide, ranking among the top 20 nations in attracting foreign investment and trade volume.

Both Vietnam and Indonesia are part of the Regional Comprehensive Economic Partnership (RCEP), but Hanoi enjoys advantages that Jakarta could benefit from. Specifically, Vietnam’s membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and its status as one of two ASEAN countries with an FTA in place with the European Union are noteworthy.

The specific advantages mentioned above have strengthened the influence of Vietnam and Indonesia in the region, laying the groundwork for sustainable development and unity within ASEAN.

Way Ahead

The elevation of Vietnam and Indonesia’s relationship to a Comprehensive Strategic Partnership signifies a commitment to deepening bilateral ties, particularly in economic cooperation. As both nations work towards enhancing collaboration in various sectors, including technology and sustainability, their partnership is poised to contribute positively to regional development and prosperity within ASEAN.

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