Indonesia and Iran will sign a preferential trade agreement (PTA) on May 23 to improve trade relations and boost the trade transaction value, Indonesia’s Trade Ministry announced on May 22.

Illustrative photo (Photo: tasnimnews.com)

The ministry's director general of international trade negotiations, Djatmiko Bris Witjaksono said that it will be the second agreement between Indonesia and the Middle East region as the first was signed with UAE on July 1, 2022.

According to Djatmiko, the PTA signing will be carried out within the framework of Iranian President Seyyed Ebrahim Raisi's visit to Indonesia from May 23 - 24.

During his visit, the two countries will also hold a bilateral meeting to discuss further trade cooperation potential.

The PTA signing will continue with the ratification process, with each country formulating its own mechanism. The products that will be listed in the PTA will include processed foods, pharmaceutical products, rubber, paper, textiles, wood, footwear, cotton, electrical machinery, motorised vehicles, manufacturing products, chemicals, and aluminum.

Indonesian products that are quite popular in the Iranian market such as vegetable oil, cocoa, coffee, tea, spices, fruits, vegetables, and fish, will also be given preference in the PTA.

Meanwhile, Indonesia will provide lower tariff facilities for several products originating from Iran, including mineral fuel, oil and its derivatives, chemicals, steel, pharmaceuticals, mechanical equipment, fruits, processed foods, nuts, and wheat.

Djatmiko emphaised that the PTA is very important as Iran is considered as a country with huge economic capabilities in the Middle East region and vast natural resources.

Indonesia sees Iran as a gateway to Central Asia, the official said, adding that by entering Iran, Indonesia can enter surrounding areas such as Azerbaijan, and even Turkey.

The total trade between Indonesia and Iran reached 54.1 million USD in the first three months of this year and it was recorded at 257.2 million USD last year.

Source: VNA