Islamabad, 11 January 2026 – Pakistan and Indonesia have signed a memorandum of understanding (MoU) to establish the Pakistan-Indonesia JTC, aiming to enhance bilateral trade and economic cooperation significantly.
The agreement follows high-level discussions held in Islamabad on January 10, 2026, between Pakistan’s Commerce Minister, Jam Kamal Khan, and Indonesia’s Vice Minister of Trade, Dyah Roro Esty Widya Putri. The MoU establishes an institutional framework for regular dialogue, facilitates market access, and resolves trade-related challenges.
This development carries important implications for South Asia, as stronger ties with Indonesia – a major ASEAN economy – could open new export opportunities for Pakistan while helping to diversify supply chains across the region.
Pakistan Indonesia JTC: Key Details of the Agreement
The Pakistan-Indonesia JTC will serve as a dedicated platform to identify and address trade barriers, promote balanced trade, and explore new areas of cooperation. Both sides expressed commitment to accelerating the expansion of the existing Preferential Trade Agreement (PTA) into a more comprehensive Comprehensive Economic Partnership Agreement (CEPA), with a target completion date of 2027.
During the talks, Minister Khan described Indonesia as a strategically important ASEAN member with significant potential to act as a regional hub for trilateral and multilateral economic engagement. He stated that Pakistan could supply Indonesia with minerals, cosmetics, pharmaceuticals, and agri-food products.
The Chief Executive of the Trade Development Authority of Pakistan (TDAP) requested Indonesian support on several priority issues, including early announcement of fruit import quotas, rationalisation of certification requirements for Pakistani exports, timely notification of rice import quotas, and improved market access for industrial-grade potatoes.
Pakistan Indonesia Trade Boost: Current Status and Future Goals
Bilateral trade between Pakistan and Indonesia already exceeds $4 billion annually, with Indonesia remaining the dominant exporter, mainly through palm oil shipments. Minister Khan acknowledged the critical role of Indonesian edible oil in Pakistan’s food supply chain and in the country’s daily consumption.
Vice Minister Putri reaffirmed Indonesia’s strong commitment to deeper economic relations through the newly established Joint Trade Committee Pakistan. Both sides agreed that regular engagement under the Pakistan Indonesia JTC would help create more balanced and sustainable trade flows.
Pakistan also announced plans to organise a single-country exhibition and business forum in Jakarta later in 2026, with invitations extended to other ASEAN member states. The event will focus on showcasing Pakistani products and building stronger business linkages.
Background
Diplomatic relations between Pakistan and Indonesia were established in 1950, shortly after Pakistan’s independence. Trade ties have grown steadily over the decades. The current Preferential Trade Agreement, signed in 2012 and effective since 2013, provides reduced tariffs on a range of goods.
In recent years, bilateral trade has shown consistent growth. In 2023, the total trade volume reached approximately $3.8 billion, representing a nearly 8 percent increase over the previous five-year period. For the first eleven months of 2025, trade stood at around $3.6 billion.
Pakistan primarily exports textiles, rice, and fruits, while Indonesia supplies palm oil, chemicals, and other commodities. The new Pakistan Indonesia MoU trade framework is expected to help address the existing trade imbalance and promote greater diversification.
Both countries share membership in the Organisation of Islamic Cooperation (OIC) and have consistently supported each other on matters of mutual interest. Recent high-level engagements, including the December 2025 visit of Indonesian President Prabowo Subianto to Pakistan, further strengthened political trust and laid the groundwork for this economic agreement.
What’s Next
The Pakistan Indonesia JTC is expected to hold its inaugural meeting in the coming months to finalise a detailed work plan. Progress on the proposed CEPA negotiations will be closely monitored, with both sides aiming for completion by 2027.
The planned single-country exhibition in Jakarta will provide an important opportunity to showcase Pakistani products and attract new business partnerships across ASEAN.
In conclusion, the establishment of the Pakistan Indonesia JTC represents a strategic step forward in bilateral relations, with the potential to deliver substantial long-term benefits through enhanced trade and investment cooperation.
Published in SouthAsianDesk, January 11th, 2026
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