The BRICS export surge is gaining real traction right now as the Eurasian Economic Union and Indonesia have signed a free trade agreement that actually eliminates tariffs. Even more, it creates annual savings of up to around $36.2 million for Russian exports. Indonesia’s Free Trade Agreement was signed by Russian Deputy Prime Minister Aleksey Overchuk during a Supreme Eurasian Economic Council meeting. Free Trade Agreement is expected to benefit 99 percent of Russia’s current exports to Indonesia, which strengthens Eurasian Economic Union trade connections with Southeast Asia’s fourth most populous country.
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Indonesia FTA Boosts Russian Exports With Tariff Cuts and Trade Gains
Agreement Creates $33M in Annual Export Savings
Indonesia’s Free Trade Agreement was finalized after negotiations that actually started back in December 2022. It went through multiple rounds of discussions between the Eurasian Economic Union and Indonesian officials.
Bilateral trade turnover has grown around 1.3 times over the past five years. The January–October data from this year showed that mutual trade increased by more than 15 percent compared to the year before. The BRICS export surge benefits from these tariff cuts in a pretty significant way. Once the agreement is fully implemented, Indonesia’s average tariff level on Russian goods will fall from 8 percent to 3.2 percent. Even the vast majority of shipments will be completely exempt from customs duties. This creates better price competitiveness for Russian exports, along with improved long-term trade sustainability.
Trade Expansion Projected to Double Within Five Years
EAEU Trade Minister Andrey Slepnev projected some significant growth for the BRICS export surge through this partnership. The removal of customs duties is being seen as a major step forward. Slepnev stated:
“In absolute terms, the reduction in duties will affect approximately 3 bln dollars of trade between the EAEU and Indonesia. We expect that trade turnover between our countries will double within the next 3-5 years after the agreement comes into effect. We expect a significant increase in deliveries to Indonesia of both agricultural and industrial goods.”
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The tariff reduction that’s been put in place establishes preferential access for Russian exports. This includes items such as polymers, fertilizers, energy products, dump trucks, pipes, metals, and non-ferrous metal products, along with a wide range of electrical equipment. Agricultural sectors also get benefits from this, with expanded access for wheat, flour, milk powder, confectionery products, and halal-certified beef and poultry. This Eurasian Economic Union framework actually creates opportunities that go beyond just the immediate tariff savings.