Indonesia and Peru have officially signed the Indonesia–Peru Comprehensive Economic Partnership Agreement (IP-CEPA), marking a strategic breakthrough in bilateral trade. With over 7,257 Indonesian products set to enjoy zero import tariffs in Peru, the deal opens new frontiers for market expansion, industrial competitiveness, and regional integration.
Key Facts & Background
• IP-CEPA signed on August 11, 2025, at the State Palace in Jakarta.
• Tariff elimination:
Peru will remove import duties on 87% of 7,257 Indonesian products, including: Passenger vehicles, Footwear (textile, rubber, leather), Palm oil and derivatives, Printing machinery, Paper and cardboard, Cloves and margarine. Indonesia will eliminate tariffs on 85% of 10,531 Peruvian products, such as Grapes, Cocoa, Plant extracts, and Fresh fruits
• Implementation timeline: Gradual tariff reductions over 1–3 years, pending ratification (estimated 12–14 months).
• Trade target: Bilateral exports projected to reach US$ 5 billion (Rp 81 trillion) over the life of the agreement, up from US$ 500 million currently.
• Indonesia’s current exports to Peru include motorbikes, cars, footwear, and palm oil; imports include cocoa, berries, and fertilizers.
• IP-CEPA is Indonesia’s second CEPA in Latin America, following the Chile agreement.
Strategic Implications
The IP-CEPA marks a pivotal step in Indonesia’s trade diversification strategy, offering a gateway to Latin America and reducing reliance on traditional markets. By securing zero-tariff access for thousands of export items, Indonesia strengthens its foothold in a region with rising demand for consumer goods, industrial inputs, and agricultural products.
For manufacturers, the agreement unlocks new opportunities in automotive, footwear, palm oil, and machinery, sectors that are central to Indonesia’s export engine. The phased implementation allows businesses to prepare for market entry, adapt logistics, and align with Peruvian standards.
Peru’s reciprocal access to the Indonesian market—especially for high-value agricultural goods—could enhance food security, supply chain diversity, and consumer choice. The agreement also sets the stage for future negotiations on investment and services, expanding the scope of bilateral cooperation.
Strategically, IP-CEPA aligns with Indonesia’s broader CEPA roadmap, which includes deals with the EU, Canada, and other emerging partners. As global trade dynamics shift, such agreements are vital to resilience, competitiveness, and inclusive growth.