Indonesia expects to sign a free trade agreement with the Eurasian Economic Union (EAEU) later this year, its senior economic minister said on Friday, a day after President Prabowo Subianto met with his Russian counterpart Vladimir Putin in St. Petersburg.
In a statement, Coordinating Minister for Economic Affairs Airlangga Hartarto said that the agreement with the Russia-dominated union would open up new opportunities for Indonesian commodity exports, including palm oil, coffee, and natural rubber, Reuters reported.
The completion of the Indonesia-EAEU trade talks was announced by Airlangga and EAEU Trade Minister Andrey Slepnev in St. Petersburg during President Prabowo Subianto’s state visit to Russia last week. During a meeting at the Constantine Palace, Prabowo and President Vladimir Putin pledged to broaden and deepen their relations across a range of sectors, including agriculture, nuclear energy, and trade.
Negotiations on a possible EAEU free trade agreement started in December 2022, and the two nations have since engaged in five rounds of negotiations. “I hope both parties can immediately follow this up by completing all the necessary stages of the process so that this agreement can be signed this year,” Airlangga. In addition to Russia, the EAEU includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan as member states.
As Reuters explains, the value of trade between Indonesia and the EAEU totaled $1.6 billion in the year to March, 85 percent higher than the same period last year. The EAEU is also one of Indonesia’s biggest purchasers of palm oil, alongside India, China, and Pakistan, with imports valued at more than $544 million in 2023.
The economic benefits of the free trade agreement are perhaps less significant than what the closer relationship with Russia signifies about Indonesia’s desire to maintain equidistant relations with the major powers at a time of growing strategic competition.
Even before taking office last October, Prabowo made it clear that he views good relations with Russia as an important part of Indonesia’s non-aligned foreign policy, Putin’s invasion of Ukraine notwithstanding. Prabowo traveled to Russia five times as defense minister between 2019 and 2024, most recently in July of last year, when he told Putin that he regarded Russia as a “great friend” of Indonesia. During last week’s state visit, which culminated in the signing of a “declaration on strategic partnership” between Russia and Indonesia, Prabowo described his meeting with Putin last week as “intense, warm, and productive.”
In addition to pursuing closer bilateral relations with Moscow (and Beijing, which Prabowo visited shortly after his inauguration), the Indonesian leader also signed off on the decision to join the BRICS grouping, which his predecessor Joko Widodo had considered, but ultimately decided against.
In announcing that Indonesia would seek full BRICS membership last October, Foreign Minister Sugiono said that seeking BRICS membership “embodies the country’s active and free foreign policy” and aligned with the main priorities of the Prabowo administration, including on “food and energy security, poverty eradication, as well as human capital development.” Indonesia officially joined BRICS in January, becoming the first Southeast Asian nation to do so.
The fact that Prabowo chose to prioritize his visit to St. Petersburg over last week’s G-7 meeting in Canada merely underlines the point. While Indonesian officials say that the Russia trip was planned long before the invitation arrived from Canadian Prime Minister Mark Carney, he is clearly not fazed by how this decision might have looked in some Western capitals.
Nonetheless, as Gatra Priyandita wrote this week for The Strategist, the pursuit of good relations with Russia is not a sign that Indonesia is “turning away from the West.”
“While it sometimes lacks coherence in the execution of foreign policy, it is pursuing what it views as a balanced and independent approach,” he wrote. “This is anchored in its long-standing commitment to non-alignment and strategic autonomy.”