Indonesia has emerged as one of Southeast Asia's resilient and steadily growing economies. Indonesia's economy remained resilient over recent years. Once heavily reliant on commodities, the country has diversified its economic base and built strong macroeconomic foundations. According to the IMF, it grew by 5.3% in 2022, slightly slowed to 5.0% in 2023 due to global headwinds, and maintained momentum with 5.1% growth in 2024. In early 2025, GDP growth stood at 4.9%, supported by infrastructure investment and stable policies, making Indonesia a promising market for Indian engineering exports.

The government's “people-first” housing initiative and the launch of the sovereign wealth fund, Danantara, are expected to boost investment and job creation. Although global trade challenges and commodity price volatility pose risks, Indonesia's focus on deregulation, digital reforms, and inclusive growth strategies is helping maintain momentum. With projected average annual growth of 4.8% over 2025–27. Indonesia continues to offer promising opportunities for Indian engineering exporters, particularly in sectors like construction, housing, and infrastructure development.

Indonesia is an important market for India. Indonesia holds 24h position among major export trading partners for India as on 2024. India's merchandise exports to Indonesia rose from USD 5 billion during 2020-21 to USD 5.4 billion in 2024-25, while engineering exports increased from USD 1.80 billion in 2020-21 reaching to USD 2.6 billion in 2022-23 and again succumbing to USD 1.9 billion in 2024-25 due to global geopolitical crisis. Despite some decline in 2023-24, engineering exports recovered in 2024-25. This indicates that, while trade has seen fluctuations, Indonesia continues to present untapped potential for Indian engineering exporters. Similarly, India is also an important destination among Indonesian import market. India ranks 10th in Indonesia's list of imports of overall goods and ranks 11th in Indonesia's list of import of engineering goods during 2024. In terms of engineering goods, Indonesia ranked 19th among India's engineering export destinations in FY 2024–25, with a 1.7% share of total engineering exports. While exports to Indonesia grew by 8.5% in March 2025, the overall annual export value declined by 17.0% compared to the previous year, indicating a need to re-engage and explore new opportunities in this market.