Industry Ministry proposes Rp1.59 T additional budget to boost value-added programmes

The Ministry of Industry has proposed an additional budget of Rp1.59 trillion for 2027, with the primary focus on strengthening programmes that deliver added value and boost the competitiveness of national industry. Minister of Industry Agus Gumiwang Kartasasmita stated the proposed additional budget is a strategic necessity for the manufacturing sector to achieve the national development targets set by the government. “This additional budget of Rp1.59 trillion is entirely directed at reinforcing programmes which provide added value and enhance national industrial competitiveness. The focus includes strengthening small industries, developing industrial human resources, downstreaming, restructuring industrial machinery and equipment, and reinforcing the national industrial ecosystem,” Menperin said. The ministry’s indicative ceiling for 2027 stands at Rp2.01 trillion, down approximately 19.51 per cent from the initial 2026 ceiling, whilst basic operational expenditure needs continue to rise, narrowing fiscal space for industrial development programmes. Agus noted that budget politics are dynamic, but the ministry must support all presidential priority programmes by sharpening programmes and allocations objectively so industrial development targets can still be achieved optimally. The majority of the proposed additional budget will be used to strengthen the small industry sector through empowerment programmes, business capacity building, market access expansion, and fostering new entrepreneurs. Priority programmes include restructuring industrial machinery and equipment, facilitating product development and market access for small and medium industries, downstreaming based on natural resources, procuring testing equipment for Indonesian National Standards implementation, and strengthening vocational education and industrial training. On national electric vehicle development, the minister reported positive progress with domestically produced electric vehicles now achieving over 60 per cent local content. He acknowledged that high dependency on imported industrial machinery remains a challenge, prompting the ministry to push the development of a domestic machine-making industry. As a concrete step, the ministry has established the Indonesia Manufacturing Centre as a hub for manufacturing technology development, industrial engineering, and national production machinery innovation. “We have prepared a roadmap and institutions focused on developing machine-making machines. Through this centre, we aim to build national capacity in producing industrial machinery and equipment so that dependency on capital goods imports can be continuously reduced,” Menperin concluded.