Deputy Investment Minister Addresses Easing of US Product TKDN Requirements

Indonesia is committed to removing non-tariff barriers for the United States, including those related to the Domestic Content Requirement (TKDN) as part of a trade agreement. Relaxations are also being implemented for import licensing, recognition of US standards, and halal certification.

With the easing of TKDN requirements, what will be the impact on the investment climate in the country? The Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM, Todotua Pasaribu, believes that this decision will not have a significant impact on the domestic investment climate.

“I don’t think there will be (an impact on the investment climate). It’s just part of a strategic move, with some of the requirements being relaxed. But there are also calculations regarding the trade we have with them, so it won’t have too much of an impact,” said Todotua when met at his office in Jakarta on Tuesday (24 February 2026).

Todotua believes that Indonesia will remain an attractive investment destination for US companies. On that occasion, he also denied that Indonesia would boycott countries that the US is boycotting as part of the trade agreement.

“There is no such agreement. We still adhere to the principles of cooperation, trade, and so on, which are based on active freedom. The fact is that we need to open communication and cooperation with each other, whether it’s with the US or other institutions, is a given. But our independence remains, it’s not related,” he explained.

“Our President is clear, President Prabowo is clear, our independence is our independence, there is no interference. The fact that we need to open communication in the context of trade and investment is a must,” he added.

Previously, the Coordinating Ministry for Economic Affairs announced that the TKDN policy would remain in effect and be applied in the context of government procurement.

This means that the TKDN requirements 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 Indonesian-made products.

Meanwhile, goods sold commercially in the national market, or directly to consumers, are generally not required to meet TKDN requirements. Therefore, this provision does not change the mechanism of competition for goods in the retail market or industry as a whole and does not automatically create unfair conditions for domestic businesses.

(ily/ara)