Month: July 2025

After a decade of negotiations, Indonesia and the European Union have finalized the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA), unlocking one of the most significant trade opportunities in Indonesia’s modern history. This deal positions Indonesia as a serious global player, integrating its economy with the EU, one of the world’s largest, wealthiest, and most regulatory-advanced markets. For Indonesian businesses, IEU-CEPA is not just a trade pact, but a platform for growth, competitiveness, and long-term sustainability.

Tariff Elimination Opens Export Channels: the agreement removes nearly all tariffs on goods traded between Indonesia and the EU. This allows Indonesian exports—from textiles and footwear to electronics, automotive components, and processed food—to enter the European market with reduced costs and higher margins. With over 400 million consumers and high demand for quality goods, the EU presents a scalable opportunity for Indonesian manufacturers and exporters.

Strategic Alignment in Resources and Regulation: IEU-CEPA also resolves long-standing trade friction, particularly around palm oil and nickel. Palm oil will continue to enter the EU market if it meets environmental standards, turning sustainability compliance into a market entry tool. Meanwhile, the EU’s demand for critical raw materials like nickel—vital for its clean energy and battery industries—aligns with Indonesia’s strategic resource base. This opens doors for foreign investment in sustainable mining and downstream processing.

Beyond Goods: Digital and Services Opportunities: the agreement extends into digital trade, services, and investment. As Indonesia’s digital economy rapidly expands, alignment with EU standards on data protection and interoperability enhances the appeal for European investors and tech companies. Local fintechs, e-commerce platforms, and creative industries will benefit from smoother access to European partners and customers.

Sustainability as a Business Advantage: IEU-CEPA is deeply rooted in sustainability. The EU’s Green Deal requires partners to meet strict environmental and labor criteria. For Indonesian firms, this is a signal to invest in renewable energy, eco-friendly production, and sustainable logistics. Complying with ESG (environmental, social, governance) standards will no longer be optional but a requirement for market access and competitiveness. The agreement also enables Indonesian businesses to tap into EU funding, expertise, and technology for green transition projects, ranging from solar energy and clean water systems to sustainable waste management.

Execution and Readiness Are Key: to fully capitalize on the IEU-CEPA, Indonesia must focus on execution. Government institutions and trade agencies must be prepared to navigate complex EU regulations and streamline export procedures. For businesses—especially SMEs—readiness will be critical. Companies must upgrade quality control, improve sustainability practices, and ensure regulatory compliance to meet EU standards. Support through financing, training, and digital tools will be essential. Industry associations and business chambers should play an active role in facilitating this transition.

A Long-Term Competitive Advantage: compared to other trade agreements Indonesia has signed—with South Korea, Australia, and Chile—IEU-CEPA offers deeper integration across 21 cooperation areas, including IP rights, digital governance, and climate policy. It is not only a trade deal, but a framework to elevate Indonesia’s global trade profile. With implementation expected in Q3 2025, now is the time for Indonesian businesses to prepare. IEU-CEPA represents a rare strategic opportunity to access a premium market, attract investment, and drive innovation.

July 17, 2025, The Jakarta Post

(https://www.thejakartapost.com/opinion/2025/07/17/indonesiaeu-cepa-a-strategic-leap-toward-global-trade-leadership.html)

United States (US) President Donald Trump has agreed to reduce import tariffs on Indonesian goods from 32% to 19%. This decision comes at a cost to President Prabowo Subianto’s government, with several conditions imposed. Andalas University economist Syafruddin Karimi said Trump’s 19% tariff reduction is not good news. Instead, it is considered a serious obstacle to the competitiveness of Indonesian products.

“President Trump’s 19% tariff reduction on Indonesian exports is not good news. Behind this seemingly lower figure compared to the previous threat of a 32% tariff, structural pressures are hidden that jeopardize Indonesia’s position in global trade,” Syafruddin told detikcom on Wednesday (July 16, 2025).

Syafruddin said this agreement places Indonesia in an unbalanced position. This is understandable, considering that while Indonesia is subject to a 19% tariff on all goods entering the US, American goods will not be subject to any tariffs upon entry into Indonesia.

This imbalance paves the way for US products to dominate the Indonesian market and undermines the competitiveness of domestic products. “When imported goods become cheaper due to tariff-free policies, local businesses will face significant pressure, and the space for national industrialization will shrink,” said Syafruddin.

Furthermore, Indonesia is also burdened with significant purchasing commitments: US$15 billion for US energy products, US$4.5 billion for US agricultural products, and the purchase of 50 Boeing aircraft.

“This is not just a trade agreement, but a unilateral purchase package that undermines the foundation of national economic independence. Within the framework of this agreement, Indonesia is seen as a passive consumer market, not an equal and sovereign trading partner,” criticized Syafruddin.

Similarly, Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (CELIOS), said the news poses more risks than benefits to Indonesia’s trade balance.

“A 19% tariff on Indonesian exports to the US, while the US can get a 0% tariff, actually poses a high risk to Indonesia’s trade balance. So, the risk is greater because the US gets a 0% tariff on imports to Indonesia,” said Bhima, contacted separately.

Bhima believes the results of Trump’s tariff negotiations remain detrimental to Indonesia’s position. He suggested the government encourage market access to Europe as a form of market diversification after the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is ratified.

“Similarly, the intra-ASEAN market can be encouraged. We shouldn’t rely too heavily on exports to the US, as the results of the tariff negotiations will still be detrimental to Indonesia’s position,” Bhima said.

July 16, 2025, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-8013692/trump-pangkas-tarif-ri-jadi-19-kabar-gembira-atau-petaka)

The administration of Samosir regency in North Sumatra plans to build a Lake Toba beach tourism spot by developing 22 kilometers of beach on Samosir Island, a plan that has received support from North Sumatra Governor Bobby Nasution.

“The concept is a long beach, which is expected to generate economic activities for the Samosir people. The North Sumatra provincial administration is ready to support it,” Bobby told Samosir Regent Vandiko Timotius Gultom in Samosir on Sunday, as quoted by Antara news agency.

Samosir Island is located in Lake Toba and has an area of 640 square kilometers. Six out of nine districts in Samosir regency are located on the island, with the remaining three districts on mainland Sumatra Island. Lake Toba was formed by a supervolcanic eruption approximately 74,000 years ago, creating a vast caldera that is now filled with water, with Samosir Island at its center.

Bobby said that collaboration and synergy between the regency administration, provincial administration, and the central government were needed to materialize the beach tourism. The 22 km tourism beach will span from Tano Ponggol in Pangururan to Simanido Port on Samosir Island. However, the plan needs to consider many issues, among them the acquisition of land that is currently privately owned.

“Collaborative steps are needed, and all stakeholders need to provide their support so the project can go well,” Bobby said.

He added that the long beach grand design must consider management, maintenance, and the appearance of the beach tourism area. Long-term analysis was also needed so that each point becomes a tourism destination that attracts visitors, both domestic and international.

“Not only buildings, but we must also understand how to maintain every spot in the future. There must be a concept so that the project is beneficial,” said Bobby, who is also the son-in-law of former president Joko “Jokowi” Widodo.

Lake Toba is one of five super priority tourism destinations in Indonesia, sometimes also known as the “New Balis”. The other destinations are Borobudur temple in Magelang, Central Java; Likupang in North Minahasa, North Sulawesi; Mandalika in Central Lombok, West Nusa Tenggara; and Labuan Bajo in West Manggarai, East Nusa Tenggara. Samosir Culture and Tourism Agency recorded 1.77 million visitors to the island in 2024. Most were domestic visitors at 1.76 million, while the number of foreign tourists stood at 15,705. The number of visitors increased by 56.7 percent from some 1 million in 2023.

Other than supporting the long beach project, Bobby also requested Samosir regency administration help with the review process on Toba Caldera’s geopark status by UNESCO assessors, which will be held on July 21-25.

“There are several important geosites on Samosir. So, we hope the long beach arrangement could help Samosir to regain its green card for the Toba Caldera Geopark,” Bobby said.

The Toba Caldera was named a UNESCO Global Geopark during the 209th meeting of the UNESCO executive board on July 2, 2020. However, Toba Caldera received a “yellow card” from UNESCO during its Global Geopark meeting in Morocco on Sept. 4-5, 2023. While no sanctions were imposed, the Toba Geopark was given two years to make improvements. The warning cited low public awareness and appreciation of geosites, poor coordination among managing stakeholders, inadequate visitor facilities, and limited research and public education related to geology, biodiversity, and cultural heritage.

July 11, 2025, The Jakarta Post

(https://www.thejakartapost.com/indonesia/2025/07/11/samosir-to-build-22-km-beach-tourism-area-on-lake-toba.html)

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) has achieved significant milestones in its fifth year of implementation. The value of trade in goods and services between the two countries has doubled in the past five years. In 2019, total trade between Indonesia and Australia was recorded at 17.7 billion Australian dollars. This figure will jump to 35.5 billion Australian dollars, or approximately IDR 382 trillion, by 2024.

Australian Ambassador to Indonesia, Rod Brazier, described this growth as evidence of the success of the two countries’ strategic partnership. Brazier added that Indonesia now enjoys a trade surplus with Australia of 3.13 billion Australian dollars (approximately IDR 33.7 trillion) in 2024.

“Over the past five years, the IA-CEPA has driven trade and investment growth, creating significant opportunities for shared prosperity and economic resilience. This means lower prices, more opportunities, and more efficient business processes in both countries. It also means more jobs and investment,” Brazier said at the IA-CEPA’s fifth anniversary celebration in Jakarta on Thursday (July 3, 2025).

Indonesia and Australia’s economic partnership is growing rapidly in complementary sectors, such as mining, agriculture, food, education, and services. This strengthens their positions as key partners in the Indo-Pacific region.

“Geopolitical tensions and trade uncertainty demonstrate the need for a high-quality agreement like the IA-CEPA. This agreement provides certainty for businesses and supports regional stability,” he emphasized.

Expanding Economic Cooperation: In the near future, Indonesia and Australia will conduct a review of the IA-CEPA to expand the scope of cooperation. According to Brazier, this step aims to maximize the economic potential of both countries and aligns with the agreement between Australian Prime Minister Anthony Albanese and President Prabowo Subianto. This review includes new strategic sectors, such as green energy and critical minerals. He also revealed that Prime Minister Albanese views Indonesia as one of the most promising economies in the world.

“Lithium is one example. We want to enhance Australia’s role as a reliable lithium supplier to Indonesia’s rapidly growing battery sector. Indonesia has the potential to become a top five global economy by 2030. Agreements like the IA-CEPA will be crucial in supporting that achievement,” Brazier explained.

July 3, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250703175006-4-646079/perdagangan-ri-australia-melonjak-2-kali-lipat-tembus-rp-382-t)

The Indonesian government and the European Union are targeting the completion of the comprehensive economic cooperation agreement or Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU CEPA) in the second or third quarter of 2026. This stage will be the final process of the IEU CEPA trade agreement, the discussions of which have been going on for 9 years, since the first round of negotiations took place in 2016.

Director General of International Trade Negotiations at the Ministry of Trade Djatmiko Bris Witjaksono said that the process of completing the trade agreement still needs more time, because each European country this year must complete the legal review process, until the completion of the agreement procedure per member country regarding the agreement document resulting from the negotiations.

“The EU is because it has 27 countries, so they need a much longer time than Indonesia. So, the ambitious target of Q1 next year can be completed or at the latest maybe Q2. Well then later after it is completed then we can sign it,” said Djatmiko during the Dissemination of IEU CEPA Negotiation Results event at the Coordinating Ministry for Economic Affairs Office, Jakarta, Friday (13/6/2025).

After the IEU CEPA signing process is completed in the second or third quarter of next year, Djatmiko said, the ratification process of the agreement will begin immediately. Only in the fourth quarter of 2026 to the first quarter of 2027 can the implementation of all agreements be implemented and utilized by each country.

One of the main benefits of implementing the IEU CEPA is the significant elimination of import tariffs. Within 1-2 years after the agreement comes into effect, as many as 80% of Indonesia’s exports to the European Union will enjoy 0% tariffs. Leading commodities such as labor-intensive products (footwear, textiles, garments), palm oil, fisheries, as well as renewable energy and electric vehicles will receive fairer preferential treatment.

The European Union itself is Indonesia’s fifth largest trading partner, with a total trade value reaching USD30.1 billion in 2024. The trade balance continues to record a surplus for Indonesia, increasing significantly from US$2.5 billion in 2023 to US$4.5 billion in 2024.

June 13, 2025, detikFinance

(https://www.cnbcindonesia.com/news/20250613161754-4-640857/hore-eropa-ri-dagang-bebas-tarif-mulai-2026)

Indonesia President Prabowo Subianto attended the Indonesia Defense 2025 Expo and Forum at JIExpo, Kemayoran, Central Jakarta. Prabowo will officially open the exhibition. Indonesia Defense 2025 is an exhibition of domestic and foreign defense equipment. This event was held for four days on 11-14 June 2025 at JIExpo Kemayoran, Jakarta. This exhibition was attended by 55 countries and participated by 32 Country pavilions. During the event, there were several defense contracts and industrial cooperation between Indonesia and participants from various countries.

The Ministry of Defense signed 27 procurement contracts with the defense industry at the Indo Defense Expo and Forum 2025. This cooperation was signed in front of President Prabowo Subianto who attended the same event held at JIExpo Kemayoran, Central Jakarta, Wednesday (11/6/2025). Prabowo was seen watching as the 27 defense contracts were signed directly by each business entity. The total value of the contracts is IDR 33 trillion.

The Ministry of Defense claims that so far since 2020 until now there have been around 792 defense cooperation contracts signed with a total project value of IDR 230 trillion. In addition to the 27 contracts, Prabowo also witnessed the cooperation signed directly by the Minister of Defense Sjafrie Sjamsoeddin with the President of the Defense Industry Secretariat (Savunma Sanayii Baskanligi/SSB) Haluk Gorgun regarding the procurement of the 5th generation KAAN fighter jet. The signing of this cooperation was carried out in a different room. In the room, a miniature of the 5th generation KAAN fighter jet was displayed. In addition, the French weapons manufacturer, KNDS, is collaborating with the Indonesian domestic industry. KNDS will carry out production cooperation with PT Pindad to PT Dirgantara Indonesia (PTDI).

The cooperation was signed on the sidelines of the Indo Defense Forum & Expo 2025 defense equipment exhibition at JIEXPO Kemayoran, Central Jakarta. At least two memorandums of understanding were carried out with PT Pindad and KNDS, namely cooperation in the field of artillery and large-caliber ammunition. This agreement includes the transfer of local production.

Then, with PT Dirgantara, KNDS signed a cooperation in the form of production of Indonesian helicopter equipment equipped with 20mm cannons. CEO of KNDS France Nicolas Chamussy said that the defense industry relationship between Indonesia and France was getting closer with these signed agreements. In fact, the KNDS booth as a representative of the French industry was visited by President Prabowo Subianto at the Indo Defense event. KNDS also signed other cooperation agreements, for example with the local industry PT SSE in the context of developing an anti-UAV variant of the domestically made P2-TIGER. As well as the Ministry of Defense’s Research and Development Agency to explore research and development topics regarding land defense.

The MoU or memorandum of understanding signed with several parties also includes cooperation in manufacturing and technology transfer. KNDS is committed to becoming a strategic partner in accelerating Indonesia’s land defense independence. Government to government or government to government Indonesia and France agreed to sign a Letter of Intent (LOI) in the defense sector between the French and Indonesian Defense Ministers within the framework of the Defense Cooperation Agreement (DCA). Under the umbrella of DCA, the two governments will open up cooperation between defense industry players in both countries, such as KNDS.

June 11, 2025, detikFinance(https://news.detik.com/berita/d-7958582/prabowo-hadiri-indo-defence-2025-expo-and-forum-di-jiexpo-kemayoran)(https://finance.detik.com/industri/d-7959181/27-kontrak-pertahanan-diteken-di-depan-prabowo-total-rp-33-triliun)(https://finance.detik.com/industri/d-7962195/raksasa-alutsista-prancis-bidik-proyek-senjata-helikopter-dengan-ri)

The Ministry of Industry (Kemenperin) supports business actors in the food and beverage industry to be more innovative and globally competitive. Therefore, the government is also encouraging domestic food and beverage companies to collaborate with international partners. This step aims to transfer technology and knowledge and expand export market expansion. Moreover, so far, the food and beverage industry has been one of the sectors that has received priority for development because it plays an important role in supporting the national economy.

“The food and beverage industry has become the backbone of the non-oil and gas processing industry, with a significant contribution to the national Gross Domestic Product (GDP) and job creation,” said Minister of Industry Agus Gumiwang Kartasasmita in a written statement, Monday (2/6/2025).

One example of international cooperation that has just been realized in the food and beverage industry sector is between PT Niramas Pandaan Sejahtera (NPS) and Tarami Corporation from Japan. PT NPS is a subsidiary of PT Niramas Utama (NU), a producer of food and beverage products with the INACO trademark. Meanwhile, Tarami Corporation is the number one fruit jelly producer in Japan based in Nagasaki and is part of DyDo Group Holdings Ltd.

Through this collaboration, NPS produces fruit jelly in cup packaging with high standards equivalent to production standards in Japan through the Japan Quality Line, a special production line that guarantees the safety, quality, and deliciousness of products equivalent to products produced in Nagasaki, Japan.

This project is also supported by Kawasho Foods Corporation (Tokyo, Japan) which is a partner in procuring some of the raw materials. The entire production process, from raw materials to the final product, is carried out in a halal manner and in accordance with internationally recognized halal certification standards.

NPS President Director Adhi S. Lukman, said that with the existing facilities, as well as a good work ethic, his party believes that this collaboration will run well and sustainably. The company is also committed to continuing to present healthy, safe, and high-quality products for Muslim consumers around the world.

“We also appreciate our partners for the work ethic improvement program for our human resources so that they can be more productive and efficient and able to produce product quality equivalent to Japanese products,” he said.

By combining innovation, halal values, and Japanese quality, the collaboration between NPS, Tarami Corporation and Kawasho Food Corporation is expected to be an example of cross-country synergy that produces real benefits for the global community, especially Muslim consumers who are increasingly aware of the importance of quality halal products.

June 2, 2025, detikFinance

(https://finance.detik.com/industri/d-7945355/perusahaan-ri-jepang-kerja-bareng-garap-produk-halal)