Indonesia–Mexico: Strengthening Ties in Diplomacy, Trade, Economy

In 2025, Indonesia and Mexico commemorate 72 years of formal diplomatic relations since their establishment in 1953. Throughout this enduring partnership, both nations have fostered multifaceted cooperation across economic exchange, cultural engagement, and international collaboration. While Mexico experiences a trade deficit with Indonesia, the bilateral relationship between both countries continues to advance, reflecting shared objectives to expand trade, investment, and diplomatic ties.

Both countries consider each other strategic partners within their respective regions and actively engage in multilateral platforms such as the G20, Asia-Pacific Economic Cooperation (APEC), MIKTA (an informal partnership between Mexico, Indonesia, South Korea, Turkey, and Australia), the G15, the United Nations, and the World Trade Organization. Diplomatic representation is also robust; the Indonesian Embassy in Mexico City is also accredited to Guatemala, El Salvador, and Belize, underscoring Indonesia’s regional diplomatic presence.

Bilateral Agreements and Legal Framework

Although Indonesia and Mexico have yet to establish a formal free trade agreement, their bilateral relationship is underpinned by a series of important treaties that provide a solid legal framework for cooperation. These include the original Trade Agreement signed in 1961, along with agreements on Scientific and Technical Cooperation (1996), Cultural and Educational Cooperation (2001), and the Avoidance of Double Taxation (2002), which was subsequently updated with a new protocol in 2013 to reflect evolving economic conditions. Additionally, the Air Transport Services Agreement, signed in 2013, facilitates connectivity between the two nations.

In a more recent development, Indonesia enhanced its treaty governance in 2023 by ratifying the Minister of Foreign Affairs Regulation No. 4/2023, which provides comprehensive guidelines for the management and implementation of international treaties, thereby reinforcing legal certainty and compliance in bilateral and multilateral engagements.

That same year, Mexico’s Ministry of Agriculture and Indonesia’s Ministry of Religious Affairs signed a Memorandum of Understanding (MoU) on Halal Certification and Quality Assurance Systems. This initiative is projected to boost Mexican exports to Indonesia and other Asian markets by assuring compliance with Islamic dietary laws (Sharia). It opens new avenues for Mexican meat producers and encourages improvements in product quality and competitiveness. Mexican authorities, including SENASICA, emphasize their role in maintaining food safety standards and bolstering Mexico’s reputation in international markets.

Trade Relations, Market Share

In 2024, Mexico’s main exports to Indonesia included machinery and data processing equipment totaling US$16.3 million. The most active exporting states were Mexico City (US$35.6 million), Jalisco (US$21.9 million), and Nuevo Leon (US$11.4 million).

The top imports from Indonesia in 2024 were automobiles and other passenger vehicles, valued at US$742 million, primarily shipped to Mexico City (US$1.214 billion), Nuevo Leon (US$476 million), and Jalisco (US$348 million).

States with the highest positive trade balances in 2024 were Morelos with US$5.76 million, Zacatecas with US$3.05 million, and Tabasco with US$277,000.

In 2024, Mexico’s exports to Indonesia totaled US$113 million, accounting for 0.018% of the country’s overall exports. Imports from Indonesia reached US$3.34 billion, or 0.53% of total imports, resulting in a trade deficit of approximately US$3.22 billion in favor of Indonesia.

Monthly trade data for April 2025 shows that Mexico exported US$9.83 million worth of goods to Indonesia, primarily phones and other wireless communication devices. These shipments came mostly from Mexico City (US$3.42 million), Jalisco (US$2.28 million), and San Luis Potosi (US$660,000). Imports from Indonesia in the same month totaled US$295 million, with passenger vehicles leading at US$77.2 million. The top receiving states were Mexico City, Jalisco, and Nuevo Leon. This resulted in a trade deficit of US$285 million for the month.

Remittances and Migration

Remittance flows between the two countries remain relatively small but indicate ongoing personal and economic ties. In 1Q25, Mexico received US$16,800 in remittances from Indonesia, whereas remittances sent from Mexico to Indonesia totaled US$631,000.

Migration data from 2020 recorded 108 Indonesian immigrants residing in Mexico, with a gender distribution of 46.3% women and 53.7% men. The states with the highest numbers of Indonesian immigrants were Michoacan with 52, Mexico City with 26, and Colima with 12.

The primary reasons for migration from Indonesia to Mexico in recent years have been familial reunification, involving 51 individuals, and economic opportunities for 39 individuals. Age groups with the highest migrant concentration were those aged 30 to 34 years with 44 people, 15 to 19 years with 26 people, and 45 to 49 years with 13 people, representing nearly 77 percent of the total migrant population.

Indonesia Economic Outlook 2025

According to the World Bank, Indonesia's economy showed notable resilience in 1Q25, achieving a robust 4.9% year-on-year growth despite ongoing global economic challenges. This steady expansion was primarily driven by strong performance in the agriculture and services sectors, which helped offset a slowdown in manufacturing and construction activities.

Fiscal discipline remains a priority for the Indonesian government, which is projected to keep the budget deficit at 2.7% of GDP throughout 2025, in line with the statutory limit. This fiscal stability reflects ongoing revenue reforms aimed at broadening the tax base and improving tax administration.  

Looking ahead, global policy uncertainty is likely to remain elevated, driven by factors such as trade fragmentation, geopolitical tensions, and volatile commodity prices. These challenges are expected to keep global growth subdued, including key markets that are Indonesia’s primary trading partners. Against this backdrop, Indonesia’s economy is projected to grow steadily between 2025 and 2027, with an average annual growth rate of 4.8%.

Investment activity is anticipated to pick up as the Government of Indonesia (GOI) launches its new housing program, while the sovereign wealth fund, Danantara, begins to implement strategic projects. The acceleration of various energy and infrastructure initiatives over the medium term will help counterbalance slower growth in net exports. On the supply side, growth will be driven by commodity-based manufacturing, agribusiness, construction, and services, sectors aligned with government priorities. After easing in 2025, inflation is expected to gradually rise to 2.6%, yet remain well within Bank Indonesia’s target range, providing a stable environment for sustained economic growth.

New US-Indonesia Deal

In July, President Trump announced a landmark trade agreement with Indonesia that aims to open previously inaccessible markets to US businesses, particularly benefiting manufacturing, agriculture, and digital sectors. The agreement establishes a reciprocal tariff rate of 19% between the two countries. Indonesia will remove tariffs on over 99% of US exports, including agricultural products, health goods, seafood, information technology, automotive products, and chemicals, creating significant market opportunities. It also addresses non-tariff barriers by exempting US companies from local content requirements, recognizing US safety and regulatory standards for vehicles and medical products, simplifying certification processes, and resolving intellectual property concerns.

The deal further improves access for US agricultural exports by exempting them from Indonesia’s import licensing regimes, ensuring transparency regarding geographical indications, and recognizing US regulatory oversight for meat, poultry, and dairy products. Both countries will establish clear rules of origin to ensure that trade benefits apply only to goods originating within their borders. On digital trade, Indonesia has committed to eliminating tariffs on products, supporting a moratorium on customs duties for electronic transmissions, and allowing secure cross-border data flows to the United States, enhancing opportunities for US tech firms.

Economic security cooperation is a key component, with Indonesia agreeing to address global excess steel capacity, remove export restrictions on critical minerals, and strengthen supply chain resilience, export controls, and investment security. Overall, the new trade deal is designed to benefit US workers, exporters, farmers, and innovators by establishing a balanced and mutually advantageous trading relationship.