Defense and renewable energy are on the agenda as Indonesia’s President Joko Widodo begins an official visit to Australia Monday.
The Indonesian leader is on a three-day trip to Australia.
Before his trip, President Joko Widodo told Australian media that the two countries "have a great potential for integration."
Indonesia has ambitions to become a global hub for the manufacture of electric batteries and vehicles, or EVs.
Indonesia is the world's biggest producer of nickel, a key component for EV batteries, but it lacks Australia's reserves of lithium, another critical ingredient.
The Indonesian president urged Australian Prime Minister Anthony Albanese to co-operate in the production of EV batteries during the G20 Summit in Bali last November.
In a statement, Albanese said "as one of our closest neighbours, Australia is building extensive cooperation with Indonesia on climate, economic development, education and regional security issues."
In 2021-22, total two-way trade in goods and services between Australia and Indonesia was worth $12.1 billion, making Indonesia Australia’s 14th largest trading partner.
Andrew Hudson, from the Centre for Policy Development - a research organization - told the Australian Broadcasting Corp. there is great trading potential.
"Indonesia’s economy is forecast to become the fourth largest in the world and larger than Germany or (the) UK in just seven years and, yet, Indonesia remains outside Australia’s top ten trading partners. It is obviously our largest neighbor, so I think there is a huge opportunity there."
Widodo will meet Prime Minister Albanese for talks Tuesday. Albanese will urge for progress on an upgraded defence deal with Indonesia, although analysts have said that Australia’s commitment to the new AUKUS alliance with the United States and Britain has provoked some uncertainty and hesitancy in Jakarta.