ISLAMABAD: Pakistan and Indonesia have agreed to review their $4 billion Indonesia-Pakistan Preferential Trade Agreement (IP-PTA) in an effort to boost bilateral trade and address the persistent trade imbalance that currently favours Indonesia.
The decision was formalised during a meeting between Prime Minister Shehbaz Sharif and Indonesian President Joko Widodo at the Prime Minister’s Office on Tuesday, where both leaders underscored the importance of strengthening economic engagement.
IP-PTA Review Aimed at Broadening Scope
Signed in 2012, the IP-PTA provides preferential tariff concessions on a variety of goods—mainly textiles, agriculture products, chemicals, and machinery. While the agreement has helped increase bilateral trade over the years, both sides acknowledged the need to:
- Expand product coverage
- Reassess tariff concessions
- Align the PTA with evolving market needs
Officials expect the review to open new avenues for enhanced market access and to help Pakistan reduce the current trade deficit.
Investment, Halal Industry, and IT Cooperation in Focus
President Widodo reiterated Indonesia’s commitment to deeper economic cooperation through:
- Indonesia’s Sovereign Wealth Fund (Danantara)
- Pakistan’s Special Investment Facilitation Council (SIFC)
Both leaders highlighted opportunities for collaboration in:
- Health and education
- Vocational training
- Halal-certified products (food, pharmaceuticals, cosmetics)
- Agriculture and smart farming
- Information technology and digital solutions
With both countries being major producers of Halal goods, the revised PTA is expected to play a key role in facilitating smoother Halal trade flows.
Regional Security and Diplomatic Cooperation
The two leaders also discussed key regional and global issues, including:
- The ongoing crises in Kashmir
- The humanitarian situation in Gaza
Both reaffirmed support for peaceful solutions based on UN Security Council resolutions. PM Shehbaz praised Indonesia’s proactive humanitarian role in Gaza and its efforts toward securing a ceasefire.
Strengthening a 75-Year Partnership
Marking 75 years of diplomatic relations, the visit reflects the growing strategic partnership between Islamabad and Jakarta. Along with trade and investment, the talks covered cooperation in:
- Defence and security
- Education and skills development
- Healthcare and pharmaceutical standards
The upcoming IP-PTA review is now expected to serve as a fresh catalyst for enhancing economic ties and balancing trade flows between the two nations.
Story by Zulfiqar Ahmad
