France-Indonesia deal could lead to new Rafale jet orders: Macron

France and Indonesia have signed a preliminary defence pact that could lead to new orders of French military equipment including Rafale fighter jets and Scorpene submarines, French President Emmanuel Macron said on Wednesday.

"I am delighted that the letter of intent signed today could open up a new perspective with new orders for Rafales, Scorpenes, light frigates," Macron said at a joint press conference alongside Indonesian President Prabowo Subianto.

Prabowo said France was one of Indonesia's main partners as it upgrades its military hardware and develops its defence industry through joint production and technology transfers.

Macron arrived in Jakarta from Vietnam on Tuesday night on the second leg of his Southeast Asia tour. The French president is scheduled to fly to Singapore on Thursday.

Dassault Aviation shares were up 3.4% in the morning session in Paris. The jets' performance came under scrutiny last month after reports that Rafales used by the Indian air force were shot down by Pakistan's Chinese-made jets in clashes.

Emmanuel Macron (2nd L) and Prabowo Subianto (2nd R) during the signing an agreement at Merdeka Palace in Jakarta. AFP

Indonesia has yet to receive any of the Rafale jets from the 2022 deal. The chief of the Indonesian Air Force Mohamad Tonny Harjono said in February that six jets would arrive in early 2026, state news agency Antara reported.

Aside from the Rafale deal, Indonesia in 2024 struck an agreement with French state-owned shipyard Naval Group to buy two "Scorpene" submarines, and in 2023 announced the purchase of 13 long-range air surveillance radars from France's Thales.

The two leaders also discussed the deepening crisis in the Middle East with Israel's military action in Gaza.

"When Palestine is recognised by Israel, Indonesia is ready to recognise Israel and we are ready to open diplomatic relations with Israel," Prabowo said. Indonesia currently does not recognise or share any diplomatic relations with Israel.

Macron reaffirmed his wish to see a two-state solution.

Emmanuel Macron greets students during his arrival at the National University in Jakarta. AFP

France and mineral-rich Indonesia also signed a host of other agreements and more than 20 MOUs worth at least $11 billion, said Indonesia's chief economic minister Airlangga Hartarto at a business forum.

The MOUs included one on cooperation between French mining company Eramet and Indonesian sovereign wealth funds Danantara and Indonesia Investment Authority (INA). The agreement aims to "explore the establishment of a strategic investment platform in the nickel sector, spanning upstream to downstream operations," Eramet, Danantara and INA said in a joint statement.

The partnership aims to develop the raw materials needed for electric vehicle (EV) batteries and the statement said a preliminary assessment will be made to identify projects.

Danantara's Chief Investment Officer Pandu Sjahrir said in the statement that the two wealth funds will manage long-term financing and Eramet will contribute technical expertise and experience in executing large-scale mining projects.

Indonesia is the world's largest producer of nickel, and also holds the biggest known reserves of the metal.

Reuters