Prime Minister Malcolm Turnbull has started talks with Indonesian President Joko Widodo which he says will centre on the pair's mutual interest in growing economic co-operation.

Mr Turnbull says they have a background in business in common, and a shared focus on jobs and growth.

The visit comes just a week before more than 300 business chiefs and four cabinet ministers take part in Australia's largest-ever delegation to Indonesia.

Sitting down for their first talks, the president again congratulated Mr Turnbull on his leadership, and commented on the proximity of the neighbours.

'The position of our two countries, Indonesia and Australia, is close to each other,' he said.

'That's a fact that we can't change.

'The closer the position, the higher the intensity of our relationship.

'The higher also the potential for friction.'

Mr Joko also thanked Australia for its recent help with its forest fires, and welcomed plans for a new consulate-general in Makassar.

Mr Turnbull said they'd received a warm and generous welcome.

He reflected on the seven decade relationship with Indonesia.

'One of the shining moments, proudest moments, of Australia's contribution to global affairs was the diplomatic support provided the immediate post-war era for Indonesia's struggle for independence and sovereignty,' he said.

A huge cheer went up in Jakarta's Tanah Abang market when Mr Widodo arrived to show Mr Turnbull around what was one of his favourite places to meet the people when he was the city's governor.

'It's a great day,' Mr Turnbull remarked as he moved through the huge crowd, shaking hands and posing for photos with stall holders.

The leaders both shed their jackets and ties, with Mr Turnbull remarking on the warm climate and the warm welcome.

'I want to introduce to the people the Australian Prime Minister, Malcolm Turnbull, so that the people will know how Indonesia and Australia are close,' the president told reporters at the market.

'Secondly, I want to show to the prime minister that this is the people's market, Tanah Abang market, the biggest in Indonesia.'

The prime minister will head to Berlin after Jakarta to meet with Chancellor Angela Merkel, before joining world leaders at the G20 summit in Antalya, Turkey.

AAP