Indonesia Removes Non-Tariff Barriers for the US as TKDN Requirements Relaxed

Indonesia to Remove Non-Tariff Barriers for the US, Local Content Requirements to be Relaxed

Indonesia is working to remove non-tariff barriers for the United States. This move includes relaxing the requirements for the Domestic Content Level (TKDN) as part of a trade agreement.

The relaxation also includes import licensing, recognition of US standards, and halal certification.

The Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM, Todotua Pasaribu, believes that the relaxation of TKDN will not have a significant impact on the investment climate. “I don’t think there will be (an impact on the investment climate). It’s just part of the overall strategy, 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 in Jakarta, Tuesday (24/2/2026).

Todotua is optimistic that Indonesia will remain an attractive investment destination for US companies. He also dismissed the possibility of a boycott against countries that are boycotted by the US 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, for example with the US and other institutions, and that is certain. But our independence remains, and it is not related,” he explained.

Todotua added that Indonesia’s independence remains a priority. “Our President is clear, President Prabowo is clear, the issue of our independence is our issue, and there is no interference. The fact that we need to open communication in order to promote trade and investment is a must,” he continued.

Previously, the Coordinating Ministry for Economic Affairs stated that the TKDN policy will still apply to government procurement. This means that the TKDN requirements apply to government projects or spending, not to all goods circulating in the market.

The aim is to promote the use of Indonesian-made products. Goods sold commercially in the national market or directly to consumers are generally not required to meet TKDN requirements. This condition does not change the competitive mechanism in the retail market or industry and does not necessarily create unfair conditions for domestic businesses.

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