12:37:37 PM | 12/17/2025
Seven decades of Vietnam-Indonesia relations have marked remarkable milestones in economic cooperation, spanning trade, investment, and emerging sectors such as the digital economy, renewable energy, and the electric vehicle ecosystem. The upgrade of bilateral ties to a Comprehensive Strategic Partnership in 2025 not only underscores the high level of political trust but also lays the foundation for the two countries to become a “dual engine” of growth, supply chain connectivity, and shared prosperity within ASEAN.
State President Luong Cuong at the meeting with Indonesian President Prabowo Subianto on the sidelines of the 2024 APEC Leaders’ Week in Peru, November 2024
Our reporter interviewed Jane Runkat, Chargé d’Affaires ad interim, Embassy of Indonesia in Hanoi, on the occasion of the 70th anniversary of diplomatic relations between Vietnam and Indonesia (December 30, 1955 - December 30, 2025).
Reflecting on seven decades of bilateral ties, what do you regard as the most significant milestones in investment and business cooperation between Vietnam and Indonesia?
The relationship between Vietnam and Indonesia, spanning seven decades, has been characterized by mutual political trust and increasingly robust economic ties. One of our most significant milestones is the elevation of the relationship to a Comprehensive Strategic Partnership (CSP) in March 2025, in line with the 70th anniversary of diplomatic relations 1955-2025. This upgrade signifies a commitment to a new era of deeper, more substantive, and comprehensive cooperation, with economic partnership specifically cited as a key pillar.
Another pivotal milestone is the exponential growth in bilateral trade. The initial goal of reaching US$10 billion in bilateral trade by 2023 was reached two years ahead of schedule. The trade growth in the past five years rose significantly, from US$8.2 billion in 2020 to US$16.7 billion in 2024. Under the CSP and reflecting the vigorous growth trajectory, both countries set a new, higher target of US$18 billion by 2028. This trade expansion is supported by multilateral agreements like the ASEAN Trade in Goods Agreement (ATIGA) and the Regional Comprehensive Economic Partnership (RCEP), which provide a clear legal framework and reduce trade barriers.
Furthermore, the increased two-way investment flow also marks a key developmental stage. In recent years, we have seen major Vietnamese enterprises like VinFast, Vingroup, and FPT Corporation significantly expand their presence in Indonesia. Meanwhile, Indonesian companies such as Ciputra and JAPFA Group have continued to thrive in Vietnam, further expanding into various sectors. This shift towards a more reciprocal investment pattern demonstrates deeper economic integration and mutual confidence in each other's markets, particularly in emerging sectors of digital, education, renewable energy, electric vehicle (EV) ecosystem, and food security.
Could you highlight key projects and sectors that have stood out and contributed notably to the partnership between the two countries?
Several high-impact projects and sectors illustrate the depth of Vietnam-Indonesia economic cooperation. In the automotive sector, VinFast’s investment in Indonesia stands out, with the construction of an assembly plant in Subang - West Java and the introduction of the Xanh SM electric taxi service, forming a comprehensive EV ecosystem. This initiative is not merely commercial, but also establishes a model for sustainable urban mobility and high-value industrial activity.
In agriculture and food security, Vaksindo’s veterinary vaccine facility (under Japfa Group) in Vietnam exemplifies the integration of research, technology, and industrial capacity, contributing to the Feed-Farm-Food ecosystem already developed by Japfa Group. Other emerging sectors include renewable energy, where both countries are aligning efforts to develop clean energy and achieve net-zero targets, and digital technology, including AI and advanced semiconductor applications.
Moreover, collaboration in fisheries, halal industry development, and logistics demonstrates a multidimensional approach, combining industrial innovation with social and community-oriented initiatives. Platforms such as the 2024 “Meet Indonesia” event in Khanh Hoa province further illustrate the success of the triple-helix model—linking government, business, and academia—to foster collaboration, drive competitiveness, and generate sustainable high-value outputs.
Party General Secretary To Lam and other leaders attend the announcement ceremony of the direct Ho Chi Minh City-Denpasar (Indonesia) air route
How does the Vietnam-Indonesia Comprehensive Strategic Partnership contribute to strengthening supply chains and advancing trade and investment across the ASEAN region?
The elevation of Vietnam-Indonesia ties to a Comprehensive Strategic Partnership (CSP) provides a foundation to strengthen supply chains, trade, and investment across the entire ASEAN region. Through this CSP, both countries can play the role of a dual economic engine and a model for intra-ASEAN cooperation.
The partnership enhances supply chain resilience and diversification by linking two major regional economies with complementary strengths. Indonesia, with its vast natural resources, large market, and focus on downstream processing, complements Vietnam’s strengths in export-oriented manufacturing. At the moment, both are enjoying demographic bonuses with a talented young workforce. By deepening their linkages in high value-added industries like high-tech industries, EV manufacturing, and agro-processing, Indonesia-Vietnam can create a more integrated and robust regional production network, reducing reliance on single external sources and acting as a more attractive hub for global foreign direct investment (FDI).
In terms of trade and investment, the relationship provides a strong foundation for the entire ASEAN economic community. As key signatories to regional free trade agreements, the partners are committed to removing trade barriers and harmonizing trade and investment regulations. As two of the largest populations in Southeast Asia, the pursuit of a high bilateral trade target of US$18 billion by Indonesia and Vietnam will contribute to economic growth in the region. In the coming years, initiatives such as cross-border digital payments will facilitate smoother and faster regional transactions, improving trade efficiency for all ASEAN members.
Looking ahead, which areas do you believe hold the greatest potential for breakthrough collaboration?
Looking ahead, the areas holding the greatest potential for breakthrough collaboration between Vietnam and Indonesia align closely with global megatrends and their respective national development goals, particularly the vision to become high-income countries by 2045.
Digital transformation and AI: The convergence of two of the region's fastest-growing digital economies presents an immense opportunity. Breakthroughs will come from establishing a strong, robust, and safe digital partnership. Collaboration and dialogue between the two countries will be important to capture the opportunities and address the challenges, such as debates on the use of AI or the risks of cybercrime.
EV ecosystem development: As Indonesia prepares to develop an EV ecosystem, the investment of VinFast in Indonesia is the precursor to a larger breakthrough. Collaboration could extend beyond manufacturing and sales to developing a comprehensive regional EV ecosystem, including battery production, charging infrastructure networks, and recycling facilities. By aligning their policies and standards, the two countries can jointly shape the future of the ASEAN automotive market.
Sustainable fisheries cooperation: Leveraging Indonesia and Vietnam’s shared geography as major maritime nations, a breakthrough can be achieved in developing a sustainable blue economy. Enhanced cooperation in fisheries technology, capacity building, combating illegal, unreported, and unregulated (IUU) fishing, and value-added processing of aquatic products—as well as strengthened port and logistics connectivity—will directly reinforce the broader ASEAN supply chain.
The emerging areas mentioned above, driven by sustainability, technology, and strategic connectivity, will further solidify the roles of Indonesia and Vietnam in ASEAN's journey toward prosperity and sustainability.
Thank you very much!
By Thu Huyen, Vietnam Business Forum
Vietnamese
