Policy paper

Arrangement between the UK and Indonesia to establish an Economic Growth Partnership

Published 20 January 2026

ARRANGEMENT BETWEEN

THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

AND

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

TO ESTABLISH AN ECONOMIC GROWTH PARTNERSHIP

The Government of the United Kingdom of Great Britain and Northern Ireland (“the UK”) and the Government of the Republic of Indonesia (“Indonesia”) (hereinafter referred to individually as the “Participant” and jointly as “the Participants”),

Reaffirming their faith in and commitment towards strengthening the rules-based international trading system;

Reaffirming their respective rights and obligations under the World Trade Organization (“WTO”) Agreements;

Recognising the contribution that bilateral trade and investment can play in driving inclusive and sustainable economic growth;

Determining to promote growth in bilateral trade through dialogue and exchange of information;

Acknowledging the importance of further discussions to facilitate trade between the Participants;

Recognising that improving existing levels of bilateral trade will require coordination and consultation across their respective governments;

Have reached the following understanding:

Objectives

The objective of this Arrangement is to establish an Economic Growth Partnership (“EGP”), which will encourage closer and deeper economic ties between the UK and Indonesia, including, where mutually decided upon, a more comprehensive economic arrangement in the future.

The Participants acknowledge a shared desire to strengthen mutual economic co-operation, particularly in the field of trade and investment, in a manner that is mutually beneficial, and respects each Participant’s sovereignty, national priorities, and prevailing laws and regulations.

Designated Contact Points

1. The Participants will designate official-level contact points from the Department for Business and Trade (“DBT”) for the UK and the Coordinating Ministry for Economic Affairs (“CMEA”) for Indonesia. These contact points will:

a. Ensure effective co-ordination and communication between the Participants;

b. Oversee and co-ordinate follow-up work under the EGP; and

c. Implement specific tasks and initiatives as directed by the Economic Growth Partnership Forum.

Areas of Co-operation

2․ The Participants will develop economic co-operation in areas and sectors including:

a. Clean Energy;

b. Health and Life Sciences;

c. Professional Business Services;

d. Financial Services;

e. Digital Economy;

f. Infrastructure and Transport;

g. Education;

h. Agriculture, Food, and Beverages;

i. Trade and Investment;

j. Supply Chain Resilience;

k. Promoting Open and Fair Competition, including related to state owned enterprises;

l. Trade and Sustainable Development, and

m. Any other areas or sectors deemed necessary to enhance economic and investment relations as jointly decided by the Participants.

3․ The Participants are to facilitate activities and co-operation on the sectors and areas set out in Annex A. This may include facilitating dialogues with relevant government officials, businesses, or other organisations, holding workshops, or exchanging information, expertise, and best practices.

4․ Except where otherwise stated the activities and understandings set out in Annex A will be regularly monitored and reviewed by the Participants, after which the Participants may decide on necessary updates, as appropriate.

5․ The Participants acknowledge the potential of the EGP to support Indonesia’s accession to the OECD. In relation to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”), the Participants recognise the outcome of the CPTPP Joint Ministerial Statement in Melbourne (21 November 2025) and that the UK will continue to share its experience of the CPTPP accession process.

Dialogue and Governance

6․ The Participants confirm the establishment of the Economic Growth Partnership Forum (“the Forum”). The Forum will meet as jointly decided by the Participants with a view to:

a. Monitoring and reviewing the activity in the sectors and areas set out in Annex A to this EGP;

b. Discussing specific promotion, investment and export opportunities with a view to addressing any potential barriers;

c. Reviewing the partnership between the Participants regularly to consider additional ways to enhance trade and investment;

d. Consulting and co-ordinating across their respective relevant governments and business sectors’; and

e. Establishing, where necessary, working groups to lead on specific areas of co-operation.

7․ The Forum will be chaired in annual rotation by Ministers or their representatives from each Participant unless otherwise decided.

Interpretation and Application of the Arrangement

8․ The Participants are committed to acting in good faith. Any differences that arise between the Participants concerning the interpretation or application of this Arrangement will be settled amicably through consultation and consensus between the Participants, and will not be referred to any third party, court, or tribunal.

Amendments

9․ This Arrangement may be amended, varied or altered at any time by mutual written consent of the Participants. Any amendment approved by the Participants will become an integral part of this Arrangement.

Status of this Arrangement

10․ This Arrangement is not an international agreement or treaty and as such does not create legally binding rights or obligations under domestic or international law. It represents the expression of intention of closer bilateral co-operation on trade and investment between the Participants.

Financial Arrangement

11․ Unless otherwise decided, each Participant will bear the cost and expenses for its participation in activities under this Arrangement. The capacity of each Participant to carry out activities under this Arrangement will be subject to the availability of funds, personnel, and other resources.

Confidentiality

12․ The Participants recognise that to facilitate the objectives of this Arrangement, information may pass between them. The sharing of information under this Arrangement is subject to the following conditions:

a. The Participants may only use the information for purposes to further the objectives of this Arrangement;

b. The Participants may only disclose any part of the information to a third party if the Participant wishing to disclose the information seeks and obtains prior written consent from the other, except in circumstances described below or the information is publicly available. Furthermore, the information sharing under this EGP shall comply with the respective national laws and regulations of each Participant; or

c. In circumstances where either Participant is legally obliged to disclose any information related to this Arrangement under applicable legislation, by court order or for another reason, it will inform the other Participant before doing so.

Commencements and Termination

13․ This Arrangement will come into operation on the date of signing and will remain in operation unless terminated by either Participant as stipulated in paragraph 14.

14․ Either Participant may terminate this Arrangement at any time by providing written notice of termination to the other Participant. The termination will take effect 180 calendar days after the date the written notice is received, or on such a date as the Participants may mutually decide.

15․ In the event that this Arrangement is terminated, such termination will not affect any ongoing activities, unless otherwise mutually decided by the Participants.

The foregoing, represents the understandings reached between the Participants upon the matters referred to therein.

Signed in duplicate at London on 19 January 2026 in the English and Indonesian languages. All text being equally valid. In case of any divergence of interpretation, the English text shall prevail.

For the Government of the United Kingdom of Great Britain and Northern Ireland

Peter Kyle

Secretary of State for Business and Trade

For the Government of the Republic of Indonesia

Airlangga Hartarto

Coordinating Minister for Economic Affairs

Annex A: UK-Indonesia Economic Growth Partnership (EGP)

1. Clean energy

1․ The Participants will seek to strengthen regulatory co-operation and joint activities on decarbonising supply chains and green financing. With a view to deepening their climate collaboration, the Participants will co-operate on:

a. Grid Connectivity and Transmission: Recognising the UK’s expertise in electrical grid design, construction, transmission and system operation, the Participants will cooperate on the development of Indonesia’s Green Enabling Super Grid. The Participants may maintain a regular dialogue involving relevant government officials from each Participant with a view to facilitating the exchange of information, including with respect to potential business engagement in the development of the Green Enabling Super Grid. In this context, and subject to the respective laws, regulations, policies, and institutional mandates of the Participants, as well as the availability of resources, the Participants will, as appropriate, support the following cooperative activities:

i. The UK will share information, where appropriate and subject to its laws and regulations, on the capabilities of UK businesses across the grid development value chain, including design, construction, and smart and flexible grid operation. The Participants acknowledge that such information-sharing may support technology transfer, skills development, and capacity-building objectives in Indonesia.

ii. The UK will seek to share with Indonesia best practice in grid design, project development, construction and operation, including smart grid operation, involving relevant public or private sector entities of both the Participants.

iii. The UK will seek to share best practice with Indonesia in project financing and project management to support the development of the Green Enabling Super Grid.

iv. Indonesia will, in accordance with its national laws, regulations, and applicable procedures, consider the potential participation of UK businesses or a consortium of UK businesses in Green Enabling Super Grid projects, including the Java–Bali connection, the Java–Sumatra connection, and other relevant renewable energy projects, including through existing planning and prioritisation processes, such as the Green Book (DRPPLN).

v. The Participants may exchange information and views on the potential availability of project finance support including through UK Export Finance (UKEF), the United Kingdom’s export credit agency and a Department of the UK Government.

b. Renewable energy, including tidal and wave energy based on National Marine Spatial Planning, and energy efficiency: the Participants welcome Indonesia’s policy initiatives that support renewable energy development.

i. The Participants recognise that the UK can support Indonesia’s ambition to develop 42.6 GW of new and renewable energy power plants in accordance with RUPTL PLN 2025-2034, including 40MW of tidal stream energy which is planned to be in operation by 2028, and will seek to identify and collaborate on opportunities for UK and Indonesian businesses to participate in upcoming projects.

ii. The Participants will collaborate and share best practice including policy formulation and licensing, to support tidal and renewable energy development in Indonesia.

c. Where appropriate, and subject to applicable laws, regulations, and policies, the Participants may exchange views on the possibility of applying flexible approaches to domestic content requirements in the clean energy sector, particularly for products where a well-established domestic supply chain is not yet available and for innovative projects.

d. Regulatory co-operation: The Participants aim to collaborate on grid transmission networks through the Renewable Energy Working Group.

e. Green Talent and Jobs Creation: The Participants underscore the importance of aligning green talent development and green job creation with long-term renewable energy strategies. The Participants welcome discussions between relevant government organisations along with UK and Indonesian businesses that support Indonesian professionals to build their skills and expertise in renewable energy, in accordance with Indonesia’s domestic labour and employment regulations, and with due regard to skills transfer, and local workforce participation.

f. Financing Clean Energy: Indonesia and the UK welcome greater participation from financial institutions and private sector players to accelerate Indonesia’s transition to renewable energy.

2. Health and Life Sciences

1․ The Participants recognise the strategic importance of innovative life science products to public wellbeing and economic growth. The Participants share the view that improving the investment climate – through enhanced clarity, efficiency, and predictability in licensing, accreditation, and regulatory processes – can contribute to improved health outcomes, strengthen healthcare system resilience, and attract sustainable investment from domestic and international stakeholders.

2․ The Participants acknowledge the importance of fostering an enabling investment climate while also supporting national efforts to strengthen domestic industrial capacity.

3․ The Participants will enhance dialogue and co-operation between relevant agencies on halal certification, among others, for pharmaceutical products with a view to promoting and facilitating trade between the Participants.

3. Professional and Business Services

The Participants acknowledge the importance of a thriving services sector in creating high-quality jobs and economic growth in a way that supports Indonesia’s efforts to develop its services sector and its alignment with international standards. The Participants share a commitment to enhance co-operation on business and professional services, including, but not limited to legal services.

4. Financial Services

1․ The Participants recognise the potential for further collaboration in financial services. The Participants acknowledge the importance of financial stability in supporting sustainable and inclusive economic growth, and also maintaining prudent measures while respecting each Participant’s national priorities and circumstances. Both Participants recognise the importance of international co-operation and dialogue, bilaterally and through multilateral fora. Through such engagement, both Participants seek to strengthen the resilience and inclusiveness of their financial systems and promote sustainable economic growth in both markets. The Participants have identified the following areas of activity.

a. Ministry of Finance-HM Treasury Working Group: The Participants reaffirm their commitment to collaborate on insurance, sustainable finance and Islamic finance through holding a programme of Financial Services Working Groups.

b. Islamic finance: The Participants recognise the potential to enhance their collaboration on Islamic finance. This may include sharing best practice on policy approaches, exchanging and sharing technical information and connecting investors to opportunities in the UK and Indonesia.

5. Digital economy

1․ The Participants recognise the growing importance of the digital economy in improving efficiency, transparency and security in cross-border trade. Noting that digital trade is a key driver of productivity and business growth, the Participants have identified the following areas of activity:

a. Sharing experience on strengthening the policy and regulatory environment for e-commerce, in view of the growing importance of e-commerce in enhancing trade connectivity, supporting Micro, Small, and Medium Enterprises (“MSMEs”), and expanding consumer access to goods and services.

b. Supporting efforts towards the adoption of paperless customs procedures, in line with international best practices.

2․ The Participants acknowledge the important role played by robust personal data protection in facilitating and deepening trade and seek to continue co-operation on enabling secure and trusted cross-border data flows.

3․ The Participants note the partnership between the Government of Indonesia and the UK Office for Product Safety and Standards (“OPSS”) to support MSMEs and acknowledge the role it plays in strengthening compliance with product safety regulations on e-commerce platforms.

4․ The Participants also note the extension of the moratorium on customs duties on electronic transmissions as decided at MC13, and note the upcoming MC14. The Participants note the importance of enhancing predictability for the development of the digital economy.

6. Infrastructure and Transport

1․ The Participants acknowledge the role of sustainable transport infrastructure in lowering logistic cost and carbon emissions, reducing traffic volumes, improving public health, and acting as a driver for economic growth, and recognise the potential for further collaboration in infrastructure and transport. This includes, but is not limited to, exploring additional opportunities for collaboration through Government-to-Government (“G2G”) Arrangements and Third Country Co-operation (“TCC”). Further opportunities for co-operation include:

a․ The Surabaya Urban Rail Project (“SURP”); the UK will continue to work with Indonesia’s Ministry of Transport (“MoT”), East Java Government and Surabaya City in the delivery of an urban rail system, including potential further collaboration on a feasibility study to support productivity, economic growth, and enhanced connectivity. The completion of a feasibility study is contingent on a decision regarding route-alignment and project phasing by government stakeholders in Indonesia.

b. Developing Transit Oriented Development (“TOD”) and Land Value Capture (“LVC”) opportunities to drive future socio-economic growth and sustainable communities around transport nodes, whether they are transport nodes, including interchanges, industrial areas, special economic zones, central business districts that mix with housing settlement, heritage areas, or healthcare and education centres. This approach will allow the Participants the opportunity to share best practice on policy approaches, exchanging and sharing technical information and connecting international investors to TOD-LVC opportunities across Indonesia.

c. Ongoing collaboration between Indonesia’s Ministry of National Development Planning (“BAPPENAS”) and the UK government to enhance the regulatory environment in Indonesia for the delivery of major transport projects, review of potential business models, support of project governance, and implementation of complex infrastructure studies.

d. The Participants acknowledge the importance of promoting transparency, accessibility, and integrity in public procurement processes to ensure fair competition and effective project delivery. Both sides will exchange information and best practices on open tender systems, digital procurement, and capacity building, while facilitating participation of qualified foreign entities in accordance with each Participant’s domestic laws and regulations.

e. The Participants also recognise the shared objective of improving the clarity, consistency, and efficiency of the Public-Private Partnership (PPP) regulatory framework. To support this, Indonesia will continue enhancing the transparency of approval processes, project preparation standards, and risk allocation mechanisms, while engaging in joint dialogues and technical co-operation to strengthen governance, investor confidence, and sustainable infrastructure development.

7. Education

1․ The Participants recognise the growing collaboration between UK and Indonesian Higher Education institutions and reaffirm the importance of education co-operation in strengthening people-to-people connections as well as supporting long-term economic and human capital development. The Participants are willing to support greater collaboration between educational institutions at all levels, including efforts to facilitate access to high-quality educational opportunities, through the following initial activity:

a. Primary and Secondary Education: The Participants will explore enhanced collaboration in the primary and secondary education sectors within the framework of Indonesia’s National Education Priorities. This includes discussion on enabling responsible establishment of international-standard schools in Indonesia, while ensuring alignment with national education regulations and standards.

b. Higher Education: The Participants acknowledge the recent success of UK universities opening in Indonesia. To build on this and encourage further collaboration, the Participants will discuss how best to enable trans-national education programmes, including Indonesia’s priorities on science, technology, engineering, mathematics and medicine. Indonesia recognises the value of specialist UK providers and programmes irrespective of an institution’s position in global university rankings. The establishment of UK universities in Indonesia will comply with Indonesia’s prevailing laws and regulations.

8. Agriculture, Food, and Beverages

1․ The Participants acknowledge the importance of strengthening co-operation in agricultural trade. The Participants are committed to exploring collaborative efforts to facilitate trade. To that end, the competent authorities of the Participants will review and process relevant outstanding company registration applications and future applications, in a timely and transparent manner, and in accordance with each Participant’s prevailing laws and administrative procedures.

2․ The Participants affirm that such co-operation will facilitate trade, support food safety, encourage innovation and investment in the agriculture and food sectors, and enhance market access in a manner that benefits their producers and consumers.

3․ The Participants acknowledge the mutual benefits of enhancing agricultural trade, including trade in meat and animal proteins, and the importance of ensuring that approval processes are efficient and transparent, and based on risk assessment while also safeguarding public health and complying with national regulations.

4․ The Participants reaffirm their commitment to the Agricultural, Food and Beverages Working Group as a key forum for structured dialogue on agricultural trade. The Participants intend to maintain productive and timely communication channels between relevant authorities and contact points, to facilitate issue resolution and policy co-ordination.

9. Trade and Investment

1․ The Participants also decide to co-operate further on the following areas:

(a) Technical barriers to trade (TBT)

i. The Participants reaffirm their rights and obligations under the World Trade Organization (WTO) TBT Agreement. To facilitate trade between them, each Participant will respond in a timely manner to reasonable requests from the other Participant for information on technical regulations, consistent with the framework of the TBT Agreement.

(b) Inward and outward investment

i. The Participants express their shared commitment to explore ways to promote and facilitate greater two-way investment across strategic sectors, including clean energy, health and life sciences, infrastructure, downstream industries and advanced manufacturing.

ii. Indonesia and the UK are united in their support for investment markets that are transparent and fair and will promptly publish or otherwise make publicly available measures relating to investment activities, allowing reasonable time between publication and the measure coming into effect.

iii. The Participants will seek to support an investment environment that could boost two-way investment over the next five years.

10. Supply Chain Resilience

1․ The Participants decide to work together to build resilient supply chains for critical goods and products, especially in clean energy, critical minerals advanced manufacturing and defence. Co-operation in these areas is essential to address global disruptions and promote strategic risk mitigation.

2․ The Participants will explore bilateral initiatives, including mapping critical supply chains to build resilience across each Participants’ economies, supported by coordination, co-operation and information sharing, where appropriate.

3․ To ensure the continued and smooth cross-border flow of goods and services, the Participants are encouraged to enhance co-operation in multimodal transport infrastructure, sustainable port development, and improvement of productivity and efficiency among port and logistics service providers, including on human resources development.

4․ The Participants may explore co-operation with relevant industry partners to support the development of semiconductor ecosystems through knowledge sharing, human resources development, and support for startups and innovation ecosystems. Such co-operation may emphasise education and skills development through strengthened collaboration with universities and higher education institutions, in line with each Participant’s national priorities. This co-operation may draw upon and remain consistent with the Memorandum of Understanding between the Government of the Republic of Indonesia and the Government of the United Kingdom of Great Britain and Northern Ireland concerning Digital Co-operation, signed in Jakarta on 21 January 2025.

11. Promoting Open and Fair Competition (Competition, Consumer Protection, Subsidies, State-Owned Enterprises)

1․ The Participants recognise that certain practices have the potential to distort the proper functioning of markets and undermine the benefits of bilateral trade and investment liberalisation. The Participants therefore affirm their shared commitment to promoting a fair, transparent, competitive and non-discriminatory trading environment that supports sustainable and inclusive economic growth, consistent with their respective domestic laws, regulations, and legitimate public policy objectives.

a. Competition

2․ The Participants recognise that maintaining domestic Competition Law which prohibits anti-competitive agreements, prohibits the abuse of dominant market positions, and effectively addresses mergers with substantial anti-competitive effects, will help to reduce barriers to trade and promote a competitive environment that attracts investment.

3․ The Participants recognise the importance of applying their respective domestic Competition Law in a transparent, timely and non-discriminatory manner, respecting the principles of procedural fairness and rights of defence of the persons concerned. The Participants recognise that any exemptions to the application of Competition Law should be transparent and based on public policy grounds.

b. Consumer Protection

4․ The Participants recognise the importance of consumer protection in boosting consumer confidence and market participation and affirm their commitment to promoting online and offline consumer protection.

5․ The Participants recognise the importance of maintaining measures against fraudulent, deceptive, misleading, or unfair commercial activities, and maintaining domestic law and regulations that provide consumers with statutory benefits in relation to goods and services supplied to them.

c. Subsidies^{[footnote 1]}

6․ The Participants recognise that either Participant may grant subsidies when they are necessary to achieve public policy objectives. The Participants acknowledge that certain subsidies could potentially affect bilateral trade and investment. The Participants recognise the importance of considering whether their respective subsidies have, or could have an adverse effect on their bilateral trade and investment.

7․ The Participants affirm their shared commitments under the WTO Agreement on Subsidies and Countervailing Measures, including the importance of fulfilling transparency obligations under Article 25.

d. State-owned Enterprises^{[footnote 2]}

8․ The Participants recognise that promoting fair competition between all enterprises, be they private or state-owned, will aid in improving conditions for bilateral trade and investment. The Participants recognise that, when their state-owned enterprises are principally engaged in commercial activities^{[footnote 3]}, they should act in accordance with commercial considerations^{[footnote 4]} in their purchase or sale of a good or service, except to fulfil any public service obligations or mandates.

9․ The Participants recognise the importance of relevant international standards and best practice, including the OECD Guidelines on Corporate Governance of State-Owned Enterprises.

e. Co-operation and bilateral dialogue

10․ The Participants recognise the importance of co-operation and bilateral dialogue between them in promoting open and fair competition. To this end, the Participants will, where appropriate and subject to available resources, promote co-operation and bilateral dialogue on the issues covered under sections 11(a) to 11(d). This could include:

i. Sharing best practices on policy approaches.

ii. Organising workshops or other appropriate fora for sharing technical information and expertise.

iii. Exchanging information, subject to the standards of confidentiality applicable to each Participant.

iv. Exploring opportunities to collaborate on addressing market distorting practices.

12. Trade and Sustainable Development

1․ The Participants recognise the vital role of trade in advancing inclusive and sustainable economic growth while acknowledging the importance of sustainable management of forests and agricultural resources in addressing global challenges such as climate change, biodiversity loss and poverty reduction.

2․ Both Participants will:

a. encourage the conservation and sustainable management of forests and the promotion of trade and consumption of timber and timber products from sustainably managed forests;

b. effectively apply laws, policies and practices aimed at protecting and restoring primary forests, peatlands, and related ecosystems, reducing deforestation, and respecting the rights of local communities and customary law communities in Indonesia and workers;

c. implement measures to combat illegal logging and related trade, including, as appropriate, with respect to third countries, and promote trade in legally harvested forest products, in particular through the implementation of the UK-Indonesia Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (“FLEGT-VPA”);

d. exchange information with the other Participant on trade-related initiatives on sustainable forest management, forest governance and on the conservation of forest cover and co-operate to maximise the impact and ensure the mutual supportiveness of their respective policies of mutual interest; and

e. ensure that forest and agriculture commodities and their derivatives traded between the Participants are produced in accordance with the sustainability objectives referred to in subparagraph (a) and (b).

1. For the purposes of this section, “subsidies” means a measure which fulfils the conditions set out in Article 1.1 of the WTO Agreement on Subsidies and Countervailing Measures, and which is ‘specific’ within the meaning of Article 2 of that Agreement. ↩

2. For greater clarity, the Participants acknowledge that this section is not intended to address matters related to government procurement, the activities of state-owned enterprises in connection with national defence or security, or state-owned enterprises owned or controlled by the sub-central level of government. ↩

3. ‘Commercial activities’ means activities, the end result of which is the production of a good or the supply of a service to be sold in the relevant market in quantities and at prices determined by an enterprise on the basis of the conditions of supply and demand, and which are undertaken with an orientation towards profit-making; activities undertaken by an enterprise which operates on a non-profit basis or a cost-recovery basis are not activities undertaken with an orientation towards profit-making. ↩

4. Commercial considerations’ means considerations of price, quality, availability, marketability, transportation, and other terms and conditions of purchase or sale, or other factors that would normally be taken into account in the commercial decisions of a privately owned enterprise operating according to market economy principles in the relevant business or industry. ↩