Singapore and Indonesia have further solidified their relationship with a sweeping set of agreements designed to reinforce trade, investment, tourism, and energy ties amidst global uncertainty. Leaders from both countries gathered for the annual Singapore-Indonesia Leaders’ Retreat in June 2025, unveiling new collaborations across key economic sectors. Singapore has maintained its long-held position as Indonesia’s top foreign investor, contributing over one-third of Indonesia’s realized foreign direct investment last year. Bilateral trade reached USD 57.6 billion in 2024, and both nations pledged to build on this robust foundation by advancing special economic zones, promoting manpower development, enhancing transport connectivity, investing in agri-business, and driving growth in tourism.
A top highlight from the 2025 retreat was the signing of three major agreements in the green economy: cross-border electricity trade, carbon capture and storage, and the development of a sustainable industrial zone in Indonesia’s Batam, Bintan, and Karimun special economic zones. These deals, collectively supported by public and private investment commitments surpassing USD 10 billion, aim to unlock the region’s renewable energy potential and accelerate both countries’ transition towards greener, more resilient economies. The cross-border electricity agreement, in particular, sets the stage for policy alignment and infrastructure development to achieve Singapore’s target of importing 6GW of low-carbon electricity by 2035 while supporting Indonesia’s ambitions as a net exporter of clean energy.
Beyond energy, deepened cooperation extends to mutual recognition in halal certification, food safety and agriculture technology, and financial stability mechanisms. Bilateral memoranda were signed to promote food security, facilitating best practice exchanges between Singaporean and Indonesian farmers, and to ensure collaboration on financial market stability through the extension of the Bilateral Financial Arrangement between the Monetary Authority of Singapore and Bank Indonesia. Both governments also emphasized the importance of human capital and regulatory improvements to attract investment and spur innovation, particularly in the Batam, Bintan, and Karimun region, which continues to be a cornerstone for joint industrial and logistics projects.
Tourism remains another major pillar, with both sides highlighting joint efforts not only to boost traffic and develop new destinations, but also to promote inclusive and sustainable approaches. Increased air connectivity and digital tourism initiatives, for example, adopting smart technology to enhance visitor experiences, are expected to drive sector growth. Collaboratively, these agreements highlight a shared resolve to safeguard mutual growth in the face of global headwinds, equipping both Singapore and Indonesia to harness new opportunities across Southeast Asia’s dynamic landscape.
(Sources: Ministry of Foreign Affairs Singapore; Ministry of Trade and Industry Singapore; The Star; Argus Media; EDB Singapore)
