Tehran, Iran— Less than a year after signing a preferential trade agreement (PTA) with the UAE, Indonesia will sign a similar treaty with Iran during the ongoing visit of the Islamic Republic’s President Ebrahim Raisi to the country.
The deal is intended to improve trade relations and boost the trade transaction value, according to Indonesia’s trade ministry.
The ministry’s director general of international trade negotiations, Djatmiko Bris Witjaksono said that it will be the second agreement between Indonesia and the West Asian region as the first was signed with UAE on July 1, 2022, Vietnam Plus reported.
According to Djatmiko, the PTA signing will be carried out within the framework of Iranian president’s two-day visit to Indonesia.
During his visit, the two countries will also hold a bilateral meeting to discuss further trade cooperation potential.
The PTA signing will continue with the ratification process, with each country formulating its own mechanism.
The products that will be listed in the PTA will include processed foods, pharmaceutical products, rubber, paper, textiles, wood, footwear, cotton, electrical machinery, motorized vehicles, manufacturing products, chemicals, and aluminum.
Indonesian products that are quite popular in the Iranian market such as vegetable oil, cocoa, coffee, tea, spices, fruits, vegetables, and fish, will also be given preference in the PTA.
Meanwhile, Indonesia will provide lower tariff facilities for several products originating from Iran, including mineral fuel, oil and its derivatives, chemicals, steel, pharmaceuticals, mechanical equipment, fruits, processed foods, nuts, and wheat.
Djatmiko emphasized that the PTA is very important as Iran is considered a country with huge economic capabilities in the West Asian region and vast natural resources.
Indonesia sees Iran as a gateway to Central Asia, the official said, adding that by entering Iran, Indonesia can enter surrounding areas such as Azerbaijan and even Turkey.
The total trade between Indonesia and Iran reached $54.1 million in the first three months of this year and it was recorded at $257.2 million last year.