KBRN, Jakarta: Indonesia and Pakistan are moving to accelerate the transformation of their Preferential Trade Agreement (IP-PTA) into a Comprehensive Economic Partnership Agreement (CEPA). The initiative reflects both countries’ commitment to deepening strategic cooperation in trade and investment across multiple sectors.

“We are encouraging the expansion of IP-PTA into CEPA, which is targeted for completion by 2027,” Indonesian Deputy Minister of Trade Dyah Roro Esti said following a bilateral meeting with Pakistan’s Minister of Commerce Jam Kamal Khan on the sidelines of the 8th Pakistan Edible Oil Conference (PEOC) in Karachi, Friday, January 9, 2026, as quoted by Antara.

Indonesia has proposed that technical negotiations begin in early 2026, building on progress made under the Indonesia-Pakistan Trade in Goods Agreement (IP-TIGA). “Expanding cooperation toward CEPA will reinforce integration in goods, services, and investment in a more comprehensive and sustainable way,” she added.

The bilateral meeting followed President Prabowo Subianto’s visit to Pakistan in December 2025, which produced several strategic agreements aimed at broadening trade ties.

Trade between the two countries reached USD 4.1 billion in 2024, marking growth of 24.07 percent. From January to November 2025, bilateral trade already surpassed USD 3.6 billion, driven largely by Indonesia’s strong export performance and resulting in a significant surplus.

Since the implementation of IP-PTA in 2013, bilateral trade has more than doubled, exceeding USD 4 billion.

The meeting also saw the signing of a Memorandum of Understanding (MoU) to establish a Joint Trade Committee (JTC). The JTC will serve as a regular forum to discuss trade promotion, information exchange, SME development, and the resolution of standards and trade barriers.

The MoU underscores close synergy between governments and businesses, particularly in the edible oil and agriculture-based industries.

Palm oil remains a cornerstone of Indonesia-Pakistan trade relations. Pakistan is Indonesia’s third-largest export destination for palm oil, importing USD 2.77 billion worth in 2024, around 12 percent of Indonesia’s total palm oil exports.

Indonesia assured that its mandatory biodiesel B50 policy will not disrupt palm oil supply to Pakistan. With large production capacity and average growth of about 5 percent annually over the past decade, Indonesia is committed to maintaining stable and reliable supply for Pakistan as a long-term strategic partner.

Indonesia also welcomed the signing of a Palm Oil Public Education MoU between GAPKI and Pakistan’s Edible Oil Refiners Association (PEORA) as well as the Pakistan Vanaspati Manufacturers Association (PVMA), aimed at promoting balanced, fact-based information on sustainable palm oil.

Additionally, Indonesia expressed appreciation for Pakistan’s operationalization of the D-8 Preferential Trade Agreement (PTA) since January 1, 2025. Looking ahead, Indonesia plans to prioritize the expansion of the D-8 PTA into CEPA during its chairmanship of the D-8 in 2026–2027, with Pakistan’s full support. ***