Indonesia-EAEU FTA Slashes Tariffs, Boosts $33M Russian Exports

EAEU and Indonesia Sign Free Trade Agreement Cutting Tariffs, Aiming to Double Trade Within 5 Years

  • The Eurasian Economic Union (EAEU) and Indonesia signed a free trade agreement eliminating tariffs on many goods.
  • The deal is expected to save Russian exporters around $36 million annually in customs duties.
  • Indonesia’s average tariff on Russian goods will decrease from 8% to about 3.2%, benefiting 99% of Russian exports.
  • The agreement aims to double trade turnover between the EAEU and Indonesia within 3-5 years.
  • Key export sectors include agriculture, industrial products, energy goods, and electrical equipment.

Indonesia and the Eurasian Economic Union (EAEU) have finalized a free trade agreement that removes tariffs on most traded goods. The deal was signed by Russian Deputy Prime Minister Aleksey Overchuk during a recent meeting of the Supreme Eurasian Economic Council. This agreement is designed to benefit nearly all Russian exports to Indonesia and improve trade relations with Southeast Asia’s fourth most populous country.

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Negotiations for this agreement started in December 2022 and saw multiple rounds of talks between EAEU and Indonesian officials. Over the past five years, bilateral trade has increased by approximately 30%, with 2023 data showing a further 15% growth compared to the previous year. The tariff reduction cuts Indonesia’s average duty on Russian goods from 8% down to 3.2%, while most shipments will be entirely exempt from customs duties. These changes will make Russian exports more price-competitive and strengthen long-term trade sustainability.

Andrey Slepnev, EAEU Trade Minister, expects the tariff removal to impact about $3 billion in trade between the two regions. He stated this could cause trade turnover to double within three to five years following the agreement’s implementation. The agreement is anticipated to boost shipments of agricultural and industrial goods to Indonesia.

The tariff benefits extend across various product categories, including polymers, fertilizers, energy products, dump trucks, pipes, metals, non-ferrous metal products, and electrical equipment. Agricultural goods such as wheat, flour, milk powder, confectionery items, and halal-certified beef and poultry will also gain expanded access under this framework. This trade deal between the EAEU and Indonesia creates financial savings and promotes wider economic integration beyond immediate tariff cuts.

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