Indonesia weighs industry feedback on plastic import duty exemptions

“The exemption policy is currently applied mostly to liquid plastic raw materials. Based on initial feedback from businesses, these products do not match the needs of downstream industries in packaging, household goods, agriculture, and MSMEs, which often require plastic pellets as raw materials,” he remarked.

In a statement received in Jakarta on Thursday, he underlined the government’s commitment to closely monitoring the policy’s implementation and incorporating stakeholder feedback on the measure, which provides six-month duty exemptions for six tariff lines covering polyethylene and polypropylene plastics.

Announced in June 2023, the policy is intended to help domestic industries cope with global market dynamics, including rising raw material costs.

“The primary aim is to meet the raw material needs of industries while taking into account domestic supply and price dynamics in international markets,” Airlangga said.

As of Oct. 13, global polypropylene prices had risen by around 42.79 percent year-on-year, while polyethylene prices were up 27.87 percent.

With that in mind, he said the duty exemptions are expected to help maintain production cost efficiency and support business sustainability in Indonesia.

He reiterated that the government would use the evaluation findings to refine the policy and ensure that it delivers tangible benefits to industries and businesses that need it.

“We will listen to input from various parties to ensure the effective implementation of this policy and that the benefits of the facility reach the intended industries,” the minister said.

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Translator: Bayu Saputra, Tegar Nurfitra