BKPM Addresses Domestic Content Requirement Relaxation in US Trade Agreement
Liputan6.com, Jakarta - Deputy Minister of Investment and Downstream Industries/Deputy Head of BKPM, Todotua Pasaribu, affirmed that the relaxation of the Domestic Content Requirement (TKDN) with the United States (US) is part of a trade agreement. This measure is an effort to remove non-tariff barriers for the US.
Todotua assured that there would be no negative impact from the TKDN relaxation on the investment climate in Indonesia, as the values and figures in trade with the US are already clear.
“I don’t think there will be any impact on the investment climate,” he said at BKPM on Tuesday (February 24, 2026).
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Todo’s conviction is strengthened because not all requirements are subject to the relaxation. He believes this is part of a strategy.
“It’s just part of a strategy, with some of the requirements being relaxed,” he said.
He assured that the relaxation of TKDN for US products does not mean that Indonesia will be completely exploited, as there are already clear figures in the trade practices between the two countries.
“But there are also calculations regarding our trade with them, so it won’t have too much influence,” he said.
Government Explanation
Previously, the Indonesian Government, through the Coordinating Ministry for Economic Affairs (Kemenko Perekonomian), stated that the policy on domestic content requirements (TKDN) remains in effect and is being implemented. This addresses the implementation of the TKDN policy in reciprocal trade agreements with the United States.
Spokesperson for the Coordinating Ministry for Economic Affairs, Haryo Limanseto, stated that the TKDN policy remains in effect and is being implemented in the context of government procurement. This means that the TKDN provisions relate to projects or government spending, not all goods circulating in the market. “This is being implemented as an effort to promote the use of domestically produced products,” he said on the ekon.go.id website on Sunday, February 22, 2026.
He added that goods sold commercially in the national market or directly to consumers are generally not subject to TKDN requirements. “Therefore, these provisions do not change the mechanism of competition for goods in the retail market or industry as a whole and do not necessarily create unfair conditions for domestic businesses,” he said.
In one of the points of the trade agreement between Indonesia and the United States regarding the removal of non-tariff barriers, Indonesia will address various non-tariff barriers, such as exempting US companies and products of US origin from local content requirements.
CELIOS: Government’s Response on TKDN for US Products Has Not Addressed Public Concerns
Previously, Director of Economic Digital at the Center of Economic and Law Studies (CELIOS), Nailul Huda, said that there was a misunderstanding in addressing public concerns regarding the TKDN regulation.
According to him, the government only seems to be emphasizing that the TKDN remains in effect for government spending, while the main concern is actually the implementation of the TKDN for consumers in general.
He affirmed that the concerns are not solely about government spending, but also about the potential elimination or relaxation of the TKDN for the general market. According to him, if this policy is eliminated, it could weaken efforts to encourage investment and strengthen the national industry.
“Our concern is about the TKDN being eliminated for consumers in general. It’s not just about government spending,” said Huda, during a Celios Press Discussion on Monday (February 23, 2026).
Huda also mentioned the polemic surrounding the TKDN regulation on smartphone products, which previously sparked protests from several global manufacturers. He said that the TKDN policy is actually one of the instruments to encourage foreign companies to invest in Indonesia.
According to him, without this policy, Indonesia risks returning to being a country that only plays a role as a market and importer, rather than being a base for independent industrial production. He also believes that the TKDN still has a positive impact on the development of the national industry if it is implemented consistently and targeted appropriately.
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Industries That Could Be Affected
On the same occasion, Director of CELIOS, Bhima Yudhistira, added that the sectors most affected if the TKDN is relaxed are electronics and automotive. He believes that US companies in these sectors are among the most active in lobbying for the TKDN policy to be eliminated.
“This will clearly affect the electronics and automotive sectors. If you remember what happened with Apple, it created a kind of training center, which is actually one way to avoid the TKDN policy. So, if these US companies are in electronics, automotive, and technology, they are the ones most likely to lobby for the TKDN to be eliminated,” said Bhima.
Bhima mentioned the experience of technology companies like Apple, which was previously in the spotlight in the polemic surrounding the TKDN for smartphone products. He believes that the various steps taken by the company are a form of adaptation to the regulations, while also reflecting the significant interest of global industry players in the TKDN policy in Indonesia.