A recent trade agreement between the US and Indonesia is set to lower prices of instant noodles like Indomie.
The historic deal eliminates Indonesia’s tariffs on over 99% of US goods, including wheat, which is a key ingredient for instant noodles. Meanwhile, the US will reduce its imposed tariff on Indonesian products from an average of 32% to 19%.
Industry experts anticipated that the removal of tariffs on US wheat will reduce production costs for Indonesian instant noodles, allowing brands like Indomie – currently the 2nd largest instant noodle brand in Asia, after Japan’s Nissin – to become more competitive.
Although some analysts have viewed the trade deal as exploitative and in favor of the US, Indonesia’s economic minister Airlangga Hartarto emphasised that the reduced tariff rate by the US on Indonesian goods represents a significant concession, and will benefit major Indonesian commodities like palm oil, cocoa and rubber.
This also represents the first time Indonesia ever granted zero tariffs to the US.
