Indonesia
Indonesia is a beneficiary of the Standard GSP. With a per capita income of $4,876 in 2023, the World Bank classified Indonesia as an upper middle-income country in fiscal year 2025 for the second year; Indonesia is therefore close to the threshold for graduating out of the GSP. Total EU imports from Indonesia amounted to about €18.4 billion in 2023, and preferential GSP imports to €5.0 billion, making it the second largest beneficiary among the Standard GSP countries (after India).
What is the GSP?
The Standard GSP targets developing countries that are classified by the World Bank as lower or lower-middle income countries and which do not have equal preferential access to the EU market through any other arrangement. Standard GSP beneficiary countries can benefit from duty suspension for non-sensitive products as well as duty reductions for sensitive products across approximately 66% of all EU tariff lines.
At a glance: EU preferential imports from Standard GSP beneficiary countries (2023, € million)
281.2M (2023)
Population
Presidential Republic
Government
5.0% (2023)
GDP Growth
3.7% (2023)
Inflation
$ 1,371.2B (2023)
GDP
Facts about Indonesia's economy
Social Development
Indonesia has the world's 4th largest population and managed to substantially reduce its poverty rate, which reached an all-time low of 8.6% in September 2024.
Export Products
Indonesia's most important export products are coal and palm oil, followed by ferro-alloys, natural gas, and lignite. The country also exports a wide range of manufactured products as well as agricultural commodities.
Trade Partners
China accounts for the largest share of trade (24% in 2023) and is both the most important source of imports and the most important export destination. Japan and the US are the second and third largest trade partners.
Economic Structure
Services (43% in 2023) and industry (40%) contribute the largest shares to Indonesia's GDP. Both the mining sector, coal, copper, gold, and tin, and the textiles and footwear industries are important pillars of the Indonesian economy. About one third of the labour force is employed in the agricultural sector, which supplies rubber, coffee, cocoa, and palm oil to the world market.
Usage of GSP Preferences
About 29% of the EU's total imports from Indonesia make use of EBA preferences. The preference utilisation rate, which represents the ratio of preferential imports to GSP eligible imports, stood at 69% in 2023, lower than in previous years.
Trade with the EU
Total trade with the EU amounted to €25.8 billion in 2023. With a share of 5.7% of Indonesia's total trade, the EU is the fifth most important trading partner.
Indonesia and the EU
Imports from Indonesia by product section (2023, € million)
Imports from Indonesia over time (€ million)
INDONESIA AND THE EU GSP
Economic Impact
42%
Share of Indonesia's exports to the EU that were eligible for reduced tariffs under the GSP in 2023.
69%
Indonesia's preference utilisation rate in 2023.
57%
Share of zero-duty imports from Indonesia.
Preference utilisation and export diversification
EU imports from Indonesia (€ million)
Preference utilisation (%) vs. total eligible imports (in € million)
EU imports of GSP preference-eligible products from Indonesia steadily increased from 2014 to 2019. Since then, they have become volatile - first dropping in 2020 and 2021, before rebounding strongly in 2022 and then decreasing again sharply in 2023. Indonesia’s preference utilisation rate remained constantly above 70% until 2022, reaching 80% in that year. In 2023, the utilisation rate dropped however to 69%. The decline in preference utilisation affected all major product sections: footwear, apparel, chemicals, and machinery.
The largest product sections under the GSP (€ million, 2023)
The graph indicates that imports from Indonesia under the GSP are relatively well-diversified. Together with India, Indonesia belongs to the GSP beneficiaries that trade the largest number of tariff lines under the GSP. Footwear continues to be the dominant product section but is closely followed by chemical products (S06b), apparel and textile articles as well as machinery and appliances. Four product sections graduated on 1 January 2020 due to their high level of competitiveness. These include live animals and animal products (S1a), animal and vegetable oils (S3), mineral products (S5), and wood and wooden articles (S9a).
SUSTAINABLE DEVELOPMENT
Indonesia maintains a high level of ratification, despite the preferential market access granted by the Standard GSP is not bound to the ratification of international conventions. Indonesia has ratified 14 out of 15 core international conventions on human rights and labour standards. In addition, Indonesia has ratified 8 international conventions on environmental protection and 4 conventions on good governance.
Core international conventions on human rights and labour standards
Ratified
- International Convention on the Elimination of All Forms of Racial Discrimination (1969)
- International Covenant on Civil and Political Rights (1976)
- International Covenant on Economic Social and Cultural Rights (1976)
- Convention on the Elimination of All Forms of Discrimination Against Women (1981)
- Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
- Convention on the Rights of the Child (1990)
- Convention concerning Forced or Compulsory Labour, No 29 (1930)
- Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
- Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
- Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
- Convention concerning the Abolition of Forced Labour, No 105 (1957)
- Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
- Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
- Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)
Not Ratified
- Convention on the Prevention and Punishment of the Crime of Genocide (1948)
Additional Conventions
- Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
- Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
- Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
- Convention on Biological Diversity (1992)
- The United Nations Framework Convention on Climate Change (1992)
- Cartagena Protocol on Biosafety (2000)
- Stockholm Convention on persistent Organic Pollutants (2001)
- Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
- United Nations Single Convention on Narcotic Drugs (1961)
- United Nations Convention on Psychotropic Substances (1971)
- United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
- United Nations Convention against Corruption (2004)
EU-Indonesia Bilateral Development Cooperation
DG INTPA
Access all info about EU-Indonesia relations on the International Partnerships website.