Foreign vs Domestic Investment in Indonesia: Targeting Different Sectors

In the midst of dominance by countries such as Singapore, China, and Hong Kong as major investors, the direction of foreign capital flows into Indonesia is increasingly concentrated on certain subsectors.

Based on the presentation by the Ministry of Investment and Downstreaming or the Investment Coordinating Board (BKPM) at the Press Conference on Investment Performance Achievements for 2026, held on Thursday (23/04/2026), the composition of investment realisations this year is dominated by Foreign Investment (PMA). PMA contributed 50.1% or Rp250 trillion, growing 8.5% year-on-year (yoy).

Meanwhile, Domestic Investment (PMDN) contributed 49.9% or Rp248.8 trillion, with 6% growth (yoy). This indicates that the investment push at the beginning of 2026 is stronger from abroad.

BKPM recorded investment realisations for the First Quarter of 2026, particularly those originating from abroad, flowing heavily into the metal-based processing industry sector, mining, and its supporting services.

This concentration affirms the shift in foreign investment strategy, which is now increasingly focused on downstreaming natural resources and strengthening the domestic industrial ecosystem.

Foreign Investment

Foreign investment realisations (PMA) in the First Quarter of 2026 show that the basic metal industry, metal goods, and non-machinery and equipment occupy the top position with an investment value of US$3.7 billion or about 24.5% of total PMA.

Domestic Investment

In contrast to foreign investment, domestic investment realisations (PMDN) in the First Quarter of 2026 show a more diverse pattern with dominance in sectors supporting domestic economic activities.

The mining subsector became the largest contributor with an investment value of Rp34.0 trillion or about 13.7%.