Jakarta. Indonesia and Iran are set to ink a preferential trade agreement during Iranian President Ebrahim Raisi’s upcoming visit to the Southeast Asian country.

"Under this trade pact, Iran will widen the market access for Indonesian processed food, pharmaceutical products, rubber, paper, textiles, footwear, among others ... as well as our palm oil, coffee, and spices,” senior Trade Ministry official Djatmiko Bris Witjaksono told a news conference in Jakarta on Monday.

Iranian fossil fuel, oil, and aluminum are expected to enjoy reduced tariffs when entering the Indonesian market thanks to the trade deal. 

Indonesia and Iran were quick to sign the trade agreement with negotiations taking less than three years to finish, according to Djatmiko. Both countries also only had seven rounds of talks. 

"Hopefully, Iran can be our gateway to a wider region, particularly Central Asia. This agreement will likely give us an opportunity to penetrate the surrounding markets; for instance, Armenia, Azerbaijan, and Afghanistan. Or even Türkiye with whom we still do not have a trade agreement," Djatmiko said.

This would also be Indonesia's second trade deal with a middle eastern country. The first one was the comprehensive economic partnership agreement (CEPA) with the United Arab Emirates (UAE). The government aims to ratify the Indonesia-UAE CEPA by the end of this year.

Government data show that Indonesia-Iran trade stood at $257.2 million in 2022, up by 23.2 percent from $208.8 million the previous year. Indonesia posted a $227.9 million surplus in the trade balance with Iran. 

Raisi is scheduled to meet with President Joko “Jokowi” Widodo at Bogor’s Presidential Palace on Tuesday. Aside from the trade agreement, Indonesia and Iran will sign a memorandum of understanding on counternarcotics during Raisi’s visit.