PALMOILMAGAZINE, JAKARTA – Indian Prime Minister Narendra Modi’s visit to Indonesia for talks with President Prabowo Subianto has highlighted the importance of strengthening bilateral economic cooperation, with palm oil expected to remain one of the cornerstone commodities in trade between the two countries.
According to a report by Rubix Data Sciences, Indonesia remained India’s second-largest trading partner in the ASEAN region during fiscal year (FY) 2026, with bilateral merchandise trade totaling US$24.8 billion. Singapore retained the top position with trade valued at US$36.1 billion.
According to news18.com, based on a report by Rubix Data Science, bilateral trade between India and Indonesia has indeed slowed in recent years. The value of goods trade fell from US$38.8 billion in FY2023 to US$24.8 billion in FY2026, representing a compound annual growth rate (CAGR) of approximately 14%.
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The slowdown was driven largely by weaker Indian exports to Indonesia. India’s exports fell sharply from US$10 billion to US$4.5 billion over the period, reflecting an annual contraction of about 23%. Meanwhile, India’s imports from Indonesia eased more gradually, declining from US$28.8 billion to US$20.3 billion.
Despite the lower trade volume, India’s trade deficit with Indonesia narrowed from US$18.8 billion to US$15.8 billion, although Indonesia continued to maintain a substantial trade surplus.
The report also highlighted a significant shift in India’s export composition. Refined petroleum products, once the country’s dominant export to Indonesia, saw their share plunge from 39% to just 5% between FY2023 and FY2026.
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Other products have since gained prominence, including frozen beef, automotive components, groundnuts, and raw tobacco, each increasing its contribution to India’s exports to Indonesia.
On the import side, India’s purchases from Indonesia continue to be concentrated in strategic commodities. Coal accounted for roughly 30% of total imports, while palm oil represented 19%, making it the second-largest import category during FY2026.
Palm oil remains a critical raw material for India’s fast-moving consumer goods (FMCG) industry, supplying manufacturers of processed foods, household products, personal care items, and cosmetics. As a result, Indonesian palm oil continues to play a vital role in supporting India’s industrial supply chain.
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Rubix Data Sciences further noted that Indonesia remained India’s largest supplier of palm oil, accounting for approximately 40% of the country’s total palm oil imports in FY2026. The figures reinforce Indonesia’s strategic position in meeting the vegetable oil demand of the world’s most populous nation.
Beyond palm oil, India’s imports from Indonesia have also expanded into newer product categories, including stainless steel, industrial fatty acids, and semiconductors, gradually broadening the scope of bilateral trade.
Modi’s visit is expected to strengthen not only diplomatic relations but also trade and investment cooperation, while helping secure the long-term flow of Indonesian palm oil to one of its most important export markets. (P2)
