Indonesia continues to add to its list of trade agreements with countries in the world. This time, it will finalize a trade agreement with the Gulf countries called the Indonesia-Gulf Cooperation Council Free Trade Agreement (I-GCC FTA).
The I-GCC FTA is targeted to be completed by the end of 2025, as the negotiation process has entered the third round. This agreement is important because it is a golden opportunity for Indonesia to strengthen export market diversification.
Executive Director of the Institute for Development Economics and Finance (Indef) Esther Sri Astuti said that the I-GCC FTA must be guarded until the end, not to be limited to discourse because this trade agreement is very promising.
The six member countries of the Gulf Cooperation Council (GCC) are Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain and Oman. With the I-GCC FTA, Indonesia has alternative export markets, not only dependent on China and the United States.
"The Gulf countries are very rich and can benefit Indonesia. This opportunity cannot come twice, so this trade agreement must be completed immediately," Esther told SUAR in Jakarta (9/9/2025).
"This opportunity cannot come twice, so this trade agreement must be completed immediately," Esther said.
Indonesian products that can be exported to these Arab countries are agricultural products, such as rice to Saudi Arabia. Understandably, many Indonesian pilgrims go to the Holy Land to perform Umrah. Thus, rice products from the country will definitely be excellent and sell well.
Meanwhile, Indonesia's main import commodities from the GCC include crude petroleum oil, other than crude petroleum oil, petroleum gas, semi-finished iron products, and various types of sulfur.
Encourage reaching the middle point
For the record, the Indonesia-GCC FTA negotiations were officially launched on July 31, 2024. This is Indonesia's third trade negotiation with partners in the Middle East region, after the Indonesia-UAE CEPA and Indonesia-Iran PTA.
Currently, Indonesia and the Gulf Cooperation Council (GCC) have completed the third round of free trade agreement negotiations - the Indonesia-GCC Free Trade Agreement (I-GCC FTA) - which took place on a hybrid basis from September 1 to September 5, 2025.
Director General of International Trade Negotiations at the Ministry of Trade, Djatmiko Bris Witjaksono, said that the I-GCC FTA negotiations are targeted for substantive completion by the end of 2025.
The third round of negotiations is one of the steps to accelerate the completion of the negotiations. "We encourage the achievement of a middle point and flexibility from both sides, especially on key issues of mutual interest," he said in an official statement received by SUAR (7/9).
"We encourage middle ground and flexibility from both sides, especially on key issues of mutual interest," said Djatmiko Bris Witjaksono.
This third negotiation discussed a number of key issues, such as trade in goods, services, investment, and rules of origin. In addition, economic cooperation, strengthening small and medium enterprises (SMEs), and the Islamic (halal) economy were also discussed.
Djatmiko emphasized that the success of this FTA is expected to strengthen the access of Indonesian products to the Middle East, Africa, and Europe.
He explained that the third round resulted in significant progress. Indonesia and the GCC managed to reach an agreement on the issue of movement of natural persons (MNP) and pushed for the completion of the negotiating text. "To accelerate the completion of negotiations, an intersession meeting will be held before the fourth round," he said.
Tria Dianti
Based on projections, this free trade cooperation can increase Indonesia's economic welfare by US$ 258.40 million and boost exports to the Gulf region by 17.4%.
Products that are projected to grow significantly include electronics (33.86%), leather (29.3%), metals (28%), manufacturing (27.7%), and textiles (30.7%).
In the January-June 2025 period, the total Indonesia-GCC trade was recorded at US$ 7.9 billion. In detail, Indonesia's exports to the GCC were recorded at US$ 7 billion and imports from the GCC were recorded at US$ 8.5 billion.
Exporters support 100%
Indonesian Palm Oil Association (Gapki) Chairman Eddy Martono said that Gapki 100% supports the government's move to accelerate the I-GCC FTA trade agreement because it can increase CPO exports.
Indonesian CPO products are already in demand in Saudi Arabia. So, with the I-GCC FTA agreement, there is an opportunity for other countries - such as Oman and Kuwait - to enjoy Indonesian CPO products as well.
"I support any government policy as long as it is good and benefits the business world," he told SUAR in Jakarta (9/9).
The largest markets for Indonesia's CPO exports are still dominated by India and China. Gulf countries can be export destination markets that must be utilized and optimized.
