October 9, 2025
JAKARTA – The government has announced plans to sign and implement the ASEAN Digital Economy Framework Agreement (DEFA) by next year, an initiative that was one of the key priorities during Indonesia’s ASEAN chairmanship in 2023.
Speaking at a press conference on Tuesday, Coordinating Economy Minister Airlangga Hartarto said the ongoing 14th round of DEFA negotiations in Jakarta was expected to achieve a 70 percent substantial conclusion of the agreement’s discussions.
“This meeting marks a step toward strengthening integration […] to finalize the ASEAN Digital Economy Framework Agreement, which will be held in Jakarta for four days,” the senior minister said.
He added that the multilateral agreement was “expected to be signed and implemented by 2026.”
DEFA serves as ASEAN’s free trade agreement (FTA) focusing on enhancing digital economic cooperation and integration among member states by harmonizing rules for digital trade, services and innovation.
Airlangga highlighted that ASEAN’s large population of around 680 million people had made the region “the world’s most dynamic digital market.”
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Last year, the region’s digital economy was valued at US$263 billion, and it is projected to rise to $1 trillion by 2030, potentially doubling to $2 trillion with the implementation of DEFA.
Furthermore, Airlangga said Indonesia led ASEAN’s digital economy in 2024, with a value of $90 billion, and could triple to $360 billion by 2030, with e-commerce expected to be the largest contributor at $150 billion.
However, he also acknowledged challenges in the negotiation process, including “diverging regulations across countries that need to be harmonized” and the limited ability of micro, small and medium enterprises (MSMEs) to expand across borders.
Airlangga added that the negotiation committee had agreed to prioritize five key segments in the agreement: financial services; electronic transmissions in line with the World Trade Organization moratorium on customs duties; the implementation of non-discriminatory digital products; undersea cables; and flexibility in digital payment systems.
As of August, DEFA negotiations had concluded 93 paragraphs, around 60 percent of the total, covering issues such as personal data protection; cybersecurity cooperation; artificial intelligence and emerging technologies; digital equity and inclusion; as well as support for MSMEs.
Launched in 2023, ASEAN’s DEFA was initially targeted for completion this year. However, the Office of the Coordinating Economy Minister stated in August that the target for completing all negotiations had been moved to early next year, with the signing expected in the final quarter of 2026.
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Before DEFA’s launch, ASEAN had enhanced its payment connectivity through the signing of a memorandum of understanding (MoU) on regional cross-border payments among five member states in 2022.
The agreement involved the central banks of Indonesia, the Philippines, Singapore, Malaysia and Thailand, enabling the use of QR codes to facilitate transactions among the countries and create multiplier effects for people and businesses across the region.
The cross-border payment initiative has also allowed Indonesia to expand its Quick Response Indonesia Standard (QRIS) system to several countries in the region, including Thailand, Malaysia and Singapore.
Bank Indonesia (BI) system policy director Ryan Rizaldy said earlier this month that the current expansion plan in the ASEAN region would prioritize countries with “stronger economic ties” and “higher transactional potential.”
He added that implementation could eventually reach other regional countries such as Vietnam, Laos and Cambodia, as they were already part of the Regional Payment Connectivity (RPC) initiative.