Bangladesh Targets $10B Indonesia Trade in Wider SEA Trade Push
Bangladesh is seeking to raise bilateral trade with Indonesia from around $4 billion to more than $10 billion by expanding exports and removing market access barriers. The push covers pharmaceuticals, garments, potatoes, halal products and other sectors, while the two sides are also looking to revive stalled trade negotiations.
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In a Nutshell
- Commerce Minister Khandaker Abdul Muktadir said Bangladesh-Indonesia trade could rise beyond $10 billion if market access barriers are removed. Bangladesh currently imports about $3.5 billion from Indonesia but exports only around $56 million.
- At the October 7 meeting with Indonesian Deputy Foreign Minister Mohammad Anis Matta, Bangladesh sought greater access for garments, pharmaceuticals, vaccines and potatoes, including easier drug registration and mutual recognition of laboratory test results.
- The two sides discussed reviving their Preferential Trade Agreement negotiations, which have been stalled since 2023 over duty free access for Bangladeshi garments. Indonesia proposed a ministerial level meeting during its October 14 to 18 international trade exhibition.
- They also discussed a CEPA, energy cooperation, increased Indonesian coal imports and the possible appointment of Pertamina to operate Bangladesh’s Single Point Mooring terminal.
- Bangladesh and Indonesia discussed mutual recognition of halal certification and possible government to government cooperation to expand halal trade.
- At the October 6 meeting between State Minister for Foreign Affairs Humaiun Kobir and Matta, Bangladesh separately proposed restoring visa on arrival for Bangladeshis, increasing Indonesian imports of Bangladeshi pharmaceuticals, procuring jute bags through a G2G arrangement and opening Indonesia’s market to Bangladeshi potatoes.
- Kobir also highlighted Indonesia’s position as the world’s largest halal food consumer market and sought its support for Bangladesh’s ASEAN Sectoral Dialogue Partnership application, RCEP membership and safe, dignified and sustainable Rohingya repatriation. Matta assured continued support.
Context
Bangladesh and Indonesia established diplomatic relations in 1972 and have since built ties across trade, energy, investment, education, tourism and disaster management. Bilateral trade averaged around $3 billion annually over the past five years and reached about $3.6 billion in 2025, but remains heavily tilted towards Indonesia, with Bangladesh now importing about $3.5 billion against exports of only around $56 million. The two countries have also been negotiating a Preferential Trade Agreement, with talks stalled since 2023.
The October 6 and 7 meetings focused on changing that imbalance by opening Indonesia’s market to Bangladeshi products while addressing the regulatory and trade barriers that have held back exports.
The Indonesia push is also part of a broader effort to expand Bangladesh’s trade presence across Southeast Asia. Bangladesh is pursuing a Free Trade Agreement with Malaysia, with the first round of negotiations scheduled for late October and both sides aiming to conclude the deal in 2027. Similarly, Bangladesh is advancing FTA discussions with Malaysia’s wealthier neighbour, Singapore, while also seeking Singapore’s support for its ASEAN Sectoral Dialogue Partnership and RCEP bids.
Why It Matters
Indonesia gives Bangladesh a large market for products it already produces competitively. Bangladesh exports pharmaceuticals to more than 100 countries, and the latest discussions on drug registration and a proposed pharmaceutical exhibition in Jakarta could help its manufacturers enter Indonesia more easily.
The same applies to potatoes, where regulatory and testing problems previously prevented exports from progressing between 2015 and 2019. For Bangladeshi producers, resolving certification requirements could make it easier to take food and other halal products into Indonesia and potentially build a stronger foothold in the wider Southeast Asian market. If certification is recognised across both markets, businesses would have fewer regulatory hurdles to navigate when entering Indonesia which boasts the world’s largest halal food consumer market.
Malaysia and Singapore show that Bangladesh is pursuing similar openings elsewhere in Southeast Asia. With Malaysia, the focus is moving towards an FTA and wider trade and investment cooperation, while Singapore is already part of Bangladesh’s efforts to deepen regional integration.
What We Think
The Indonesia meetings make more sense when viewed as part of Bangladesh’s broader push to solidify its position in Southeast Asia. Alongside the FTA track with Malaysia and engagement with Singapore, Dhaka is building relationships across the region while pursuing ASEAN and RCEP access, giving Bangladeshi businesses more avenues to diversify their export markets.