Vietnam-Indonesia trade expected to exceed 15 billion USD soon

Since Vietnam and Indonesia established their diplomatic ties in 1955, the bilateral relations have been developing strongly in all fields.

According to the Department of Asia-Africa Markets under the Ministry of Industry and Trade, economic and trade ties between Vietnam and Indonesia have recorded strong development in the past time as both economies have a lot of potential and are emerging and developing rapidly.

Vietnam is a reputable and high-quality supplier of many products to the Indonesian market such as rice, coffee, rubber, seafood, and textiles - Photo: VNA

Indonesia is the 16th biggest economy in the world, the biggest economy in the Association of Southeast Asian Nations (ASEAN) and also the largest market in ASEAN with more than 270 million consumers with its middle class growing in size.

Furthermore, Indonesia is also a market with a lot of room for Vietnamese products. Meanwhile, Vietnam is a market with great potential for Indonesia to promote cooperation in both trade and investment.

The trade turnover between the two countries recorded positive growth in the past tine. In 2013, the bilateral trade reached only 4.8 billion USD. In 2022, it was nearly triple, reaching 14.1 billion USD.

In the first four months of 2023, the two-way trade hit more than 4.2 billion USD with Vietnam’s exports to Indonesia reaching 1.6 billion USD, 9% higher than the same period in 2022. It is expected that in 2023, the bilateral trade turnover can reach or exceed 15 billion USD.

In Southeast Asia, Indonesia is currently Vietnam's 3rd largest trading partner, while Vietnam is Indonesia's 4th largest trading partner.

Notably, Vietnam is a reputable and high-quality supplier of many products to the Indonesian market such as rice, coffee, rubber, seafood, textiles, footwear, mobile phones and components, iron and steel, construction materials, and plastic products.

On the other hand, many of Indonesia's key products such as coal, auto parts, palm oil, plastic raw materials, animal feed and raw materials, chemicals, and metals are preferred by Vietnamese businesses.

In addition to bilateral cooperation, the two countries have also closely coordinated and supported each other in multilateral economic cooperation frameworks such as ASEAN, the World Trade Organisation (WTO), Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM), and Regional Comprehensive Economic Partnership (RCEP).

Pham The Cuong, Vietnamese Trade Counsellor in Indonesia, said that in the first four months of 2023, Vietnam’s rice exports to the Indonesia brought home 149 million USD, a sharp increase of 2,514% compared to the same period in 2022. Besides importing rice, Indonesia is also a very potential market for Vietnamese food.

With a population of 275 million people, Indonesia spends about 16 billion USD importing food, foodstuffs and beverages, accounting for 6.5% of the country's total imports.

According to Cuong, Vietnam can expand the exports of instant noodle, vermicelli, frozen dumplings, canned fruits (lychee and longan), milk, dairy products, honey, instant coffee, and passion fruit juice.

Cuong said that as the majority of Indonesia’s population are Islams, Indonesia is a market with the largest demand for Halal certified products in the world. Therefore, export businesses should proactively learn and apply for Halal certification from Indonesia.

Meanwhile, to promote deep processing and increase product values, Indonesia plans to ban the export of 21 groups of goods in the form of unprocessed raw materials from now until 2040. Particularly, the export of raw bauxite has been banned from June 2023, followed by copper and tin products.

In the list of the 21 commodity groups, there are some products whose export bans will affect Vietnam such as coal, shrimp, aquatic products, crabs, seaweed, and sawn timber.

On the sidelines of the 55th ASEAN Economic Ministers Meeting (AEM 55), Indonesian Minister of Trade Zulkifli Hasan said that Indonesia always considers Vietnam as one of Indonesia's important economic and trade partners in Southeast Asia.

Hasan suggested Vietnam consider and soon resume the exchange of delegations, especially the cooperation mechanism and annual forum between the Indonesian Ministry of Trade and the Vietnamese Ministry of Industry and Trade.

Indonesia hopes to learn Vietnam’s experience in aquaculture production and exports, he said.

Indonesia also called for Vietnamese businesses to invest and cooperate with Indonesian businesses to develop the electric vehicle industry.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien agreed with Hasan's proposals on the early resumption of the cooperation mechanism, information exchange and annual forum between the two ministries, which was interrupted in the last two years due to the COVID-19 pandemic.

Dien proposed that Hasan encourage Indonesian seafood businesses to participate in fairs, trade promotion activities, and business forums held in Vietnam to connect the business communities of the two countries.