Indonesia and Pakistan are looking to forge closer ties especially in the field of textile and value-added products. Indonesia is interested in special economic zones being developed in Pakistan. Capacity building, cultural restoration and revitalisation of historical and tourist places are identified as potential areas for partnership.
Bilateral trade between Indonesia and Pakistan is currently close to $2.2 billion, tilting heavily in Indonesia’s favor due to significant exports to Pakistan of palm oil and coal. Pakistan has extended a 15 per cent margin of preference over the standard tariff rate to Indonesian palm oil products. This helps in decreasing prices of vegetable ghee and cooking oil in the country and having a positive impact on the overall economy of the country.
The Indonesia-Pakistan Preferential Trade Agreement was signed in 2012. Under the PTA, Indonesia grants market access at preferential rates to Pakistan’s export products including fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans, sports goods, leather goods and other industrial products. Similarly, Pakistan provides market access at preferential tariff rates to Indonesian exports.