Indonesia, Chile agree deeper two-way market access under IC-CEPA

JAKARTA, SANTIAGO, TANGERANG, BANTEN, INDONESIA, CHILE, 29 AUGUST 2026 —

Indonesia and Chile Deepen Trade Ties Under IC-CEPA, Targeting Bilateral Market Access and $1 Billion+ Exports by 2030

Deputy Trade Minister Dyah Roro Esti Widya Putri and Chilean Agriculture Deputy Minister Francesco Venezian announced the framework in Jakarta on August 28, 2026, signaling a shift toward more balanced trade flows and concrete business deals, including zero-tariff exports of Indonesian cocoa powder and Chilean wine.

The agreement marks a strategic pivot for Indonesia, which has long sought to diversify its export base beyond commodities by leveraging IC-CEPA—ratified in 2022—to unlock demand for processed foods, footwear, automotive parts, and tropical commodities in Chile’s $350 billion economy.

While Indonesia currently enjoys a $346.8 million trade surplus with Chile (2025), officials acknowledged asymmetries in market access, particularly for Chilean agricultural products like cherries, wine, and beef, which face regulatory hurdles including halal certification, sanitary standards, and customs procedures.

"We are open to Chilean products that comply with our regulations, but we must also ensure Indonesian exporters—especially SMEs—gain broader footholds in Chile’s market," Roro stated, citing tariff-free exports of processed cocoa by PT Mandala Prima Makmur to Alimentos 4M SpA as a model for scaling similar deals.

Trade Data Reveals Growing but Uneven Utilization of IC-CEPA Indonesia’s utilization of IC-CEPA preferences rose to 75.7% of total exports to Chile in 2025, up from 68% in 2024, with certified origin documents (SKA) worth $334.14 million—an 21.36% increase year-on-year. Top beneficiaries included motor vehicles, footwear, fertilizers, and paper products, which collectively accounted for over 60% of Indonesia’s $440.8 million exports last year.

However, Chilean officials highlighted persistent barriers for agricultural goods, where only wine (fresh grapes) has fully exploited tariff preferences, with imports valued at $6.97 million (1,887 tons) in 2025. Venezian emphasized that Chile’s access hinges on stricter adherence to food safety protocols, halal certification for meat/dairy, and phytosanitary compliance—a process he described as "a work in progress" but critical for expanding beef and dairy exports to Indonesia’s $150 billion food market.

SMEs and Bilateral Missions Drive Concrete Deals Indonesia’s push to broaden IC-CEPA benefits extends beyond large exporters, with the government spotlighting the UMKM BISA Ekspor program, which facilitated PT Mandala Prima Makmur’s $739,030 cocoa powder sale to E-Cibo SpA in 2026 under zero-tariff terms.

To accelerate such transactions, both nations will co-host the Indonesia-Latin America and Caribbean (INA-LAC) Business Mission in Santiago (October 1–2) and Chile’s participation in the 41st Indonesia Trade Expo (TEI) in Tangerang (October 14–18), where officials aim to match Indonesian manufacturers with Chilean distributors for commodities like spices, tropical fruits, and handicrafts.

Venezian invited Roro to a Chile Business Forum in early October, framing the visit as an opportunity to align on regulatory harmonization and explore joint ventures in climate-resilient agriculture—a priority for Chile amid its drought-prone vineyards and Indonesia’s palm oil sector.

Outlook: $1 Billion Trade Target and IC-CEPA Review With bilateral trade hitting $534.9 million in 2025 (up 12.26% YoY) and Indonesia’s first-half 2026 surplus at $162.2 million, officials hinted at ambitious growth projections. A Chilean proposal to convene the second IC-CEPA review meeting in Santiago—focused on deepening goods, services, and investment ties—could pave the way for expanded access in sectors like fisheries (Chile’s frozen fish exports to Indonesia) and pharmaceuticals.

Roro cautioned that progress depends on resolving non-tariff barriers, particularly for Chilean wine and beef, while Venezian stressed Chile’s commitment to halal certification and traceability systems. "The foundation is strong, but we must translate access into diversified trade and SME partnerships," Roro said, adding that Indonesia’s TEI participation would prioritize matchmaking for processed foods and halal-certified products—a segment Chile views as a $500 million opportunity by 2030.

Malaysia’s Stakes in Indonesia-Chile Trade Expansion For Malaysian businesses, the Indonesia-Chile trade deepening presents both competition and collaboration opportunities. While Malaysia’s palm oil and electronics exports to Chile remain niche (total trade: $120 million in 2025), Indonesian competitors like processed cocoa and footwear could gain traction in Chile’s $20 billion retail sector.

Conversely, Malaysian agri-tech firms—such as those supplying halal certification or cold-chain logistics—may find demand rising as Chile seeks to meet Indonesia’s food safety standards. Analysts note that Malaysia’s Free Trade Agreements (FTAs) with Chile (since 2019) and Indonesia (since 2022) could enable triangular trade flows, particularly in halal-certified processed foods or sustainable palm oil derivatives, if regulatory alignment improves.

The next critical test will be Chile’s ability to secure halal approvals for beef and dairy by late 2026, a deadline officials from both nations have flagged as pivotal for balancing trade flows.

Related: Dyah Roro Esti Widya Putri