Jakarta, Aktual.com \u2013 The government, through the Ministry of\nInvestment and Downstreaming\/BKPM, has stated that the relaxation of the\nLocal Content Requirement (TKDN) in the Indonesia-US trade agreement\nwill not disrupt the national investment climate. The policy is\ndescribed as part of a strategy to remove non-tariff barriers while\nstill protecting domestic industries.<\/p>\n
Deputy Minister of Investment and Downstreaming\/Deputy Head of BKPM,\nTodotua Pasaribu, said the relaxation is being carried out in a limited\nmanner and has undergone careful calculations regarding trade relations\nbetween the two countries.<\/p>\n
\u201cI don\u2019t think it will have an impact on the investment climate. It\nis just part of a strategy, with some of the requirements being\nrelaxed,\u201d he said at the BKPM office in Jakarta, quoted on Wednesday\n(25\/2\/2026).<\/p>\n
According to Todotua, the government continues to pay attention to\nthe trade balance between Indonesia and the United States in every\npolicy taken. He said that this step will not reduce Indonesia\u2019s\ncompetitiveness as an investment destination.<\/p>\n
Furthermore, the relaxation is said to not be a unilateral decision\nwithout reciprocal calculations in trade relations. \u201cHowever, there are\ncalculations involved. Our trade with them is not greatly affected by\nthis,\u201d he said.<\/p>\n
On the other hand, Director of Digital Economy at the Center of\nEconomic and Law Studies (CELIOS), Nailul Huda, believes that public\nconcern lies in the possibility of relaxing the TKDN for the general\nmarket.<\/p>\n
\u201cOur concern is related to the TKDN being abolished for consumers in\ngeneral, not just for government procurement,\u201d he said in a forum held\nby CELIOS online on Monday (23\/2\/2026).<\/p>\n
So far, the TKDN policy has been an important instrument to encourage\nmanufacturing investment and technology transfer into the country. If\nthis obligation is relaxed more broadly, companies are considered to be\nable to choose the import route rather than strengthening local\nproduction.<\/p>\n
Huda also reminded of the impact of the policy on companies that have\ninvested heavily in the manufacturing sector. \u201cWhat I am worried about\nis that manufacturers who have built factories in Indonesia will switch\nto being just traders and reconsider the continuation of factory\noperations in Indonesia,\u201d he said.<\/p>\n
In this case, CELIOS believes that the electronics and automotive\nsectors are the most vulnerable to be affected because they are highly\ndependent on the certainty of local content policies. Without consistent\nimplementation of the TKDN, Indonesia risks becoming more of a market\nthan an industrial production base.<\/p>\n
(Nur Aida Nasution)<\/p>\n
This article was written by:<\/p>\n
Eka Permadhi<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-claims-relaxation-of-local-content-requirement-is-safe-for-investment-celios-warns-of-industrial-1772050129", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }