Indonesia to buy S$1.55 billion worth of Russian jets

Indonesia Air Force Sukhoi fighter jets fly near a statue over Merdeka Square during Independence Day celebrations in Jakarta, Indonesia Aug 17, 2017.
Indonesia Air Force Sukhoi fighter jets fly near a statue over Merdeka Square during Independence Day celebrations in Jakarta, Indonesia Aug 17, 2017.PHOTO: REUTERS

JAKARTA (Reuters) - Indonesia will buy 11 Sukhoi fighter jets worth US$1.14 billion (S$1.55 billion) from Russia in exchange for cash and Indonesian commodities, two Cabinet ministers said on Tuesday (Aug 22).

The South-east Asian country has pledged to ship up to US$570 million worth of commodities in addition to cash to pay for the Sukhoi SU-35 fighter jets, which are expected to be delivered in stages starting in two years.

Indonesian Trade Minister Enggartiasto Lukita said in a joint statement with Defence Minister Ryamizard Ryacudu that details of the type and volume of commodities were "still being negotiated".

Previously he had said the exports could include palm oil, tea, and coffee.

The deal is expected to be finalised soon between Indonesian state trading company PT Perusahaan Perdangangan Indonesia and Russian state conglomerate Rostec.

Russia is currently facing a new round of US-imposed trade sanctions.

Meanwhile, South-east Asia's largest economy is trying to promote its palm oil products amid threats of a cut in consumption by European Union countries. Indonesia is also trying to modernise its ageing air force after a string of military aviation accidents.

Indonesia, which had a US$411 million trade surplus with Russia in 2016, wants to expand bilateral cooperation in tourism, education, energy, technology and aviation among others.