Jakarta. State-owned arms manufacturer Pindad has signed a memorandum of understanding with South Africa's defense contractor Paramount Group to develop and market locally-made armored vehicles for the Indonesian Military, or TNI.

The agreement was signed on Monday in Bangkok, on the sidelines of the biennial defense expo Defense & Security 2019, Paramount said in a statement on Tuesday.

"Indonesia is a regional powerhouse with strategic importance for stability and economic growth in Southeast Asia. We are pleased to partner with Pindad, the state-owned company with a heritage of more than 200 years," Eric Ichikowitz, the senior vice president of Paramount Group, said.

"We are looking forward to apply our world-leading design and engineering expertise to develop and produce a range of armored vehicle systems specifically designed to meet the requirements [of the TNI]," Ichikowitz said.

Paramount produces land, sea and air armored vehicles and has been promoting a portable manufacturing method that allows for in-country manufacturing.

Pindad also produces armored vehicles as well as weapons for the domestic and export markets.

"We hope the partnership with Paramount Group will allow us to develop more defense products together, especially armored vehicles," Pindad president director Abraham Mose said after signing the MOU.

President Joko "Jokowi" Widodo had announced earlier that his administration will boost the development of Indonesia's defense industry to help prop up its economy.