Investment Ministry Says TKDN Relaxation Will Not Drive Away Existing Investors
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has assessed that the planned relaxation of local content requirement (TKDN) policies will not cause investors who have already built factories domestically to flee.
The government plans to relax TKDN requirements, particularly for information and communication technology (ICT) product demands from the United States, as a bargaining tool to reduce reciprocal tariffs imposed by US President Donald Trump.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu said his office is confident that the loosening of TKDN or policy deregulation towards greater flexibility will not affect investments already established domestically.
"Not really — if, say, this TKDN relaxation happens, we can actually pursue fiscal extensification and other measures," Todotua told reporters at the Coordinating Ministry for Economic Affairs office on Monday (14/4/2025).
According to him, the risks or impacts of the planned TKDN relaxation can be anticipated through other protective policies, including expanding the scope of fiscal stimulus provision.
"So actually this strategy is still our thinking to open up the largest possible share," he said.
On the other hand, he also assured that the overhaul of TKDN policy would not impact investment from technology giant Apple Inc. in Indonesia.
"There is no impact — Apple's investment is still proceeding, with several projects already underway and several more in preparation," he explained.
Rather than leaving Indonesia, Todotua sees potential for US investors to enter the country, from the technology sector through to oil and gas. However, he was unable to elaborate further on the investments to be made domestically.
Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said an Indonesian government delegation would depart for the US from 16 to 23 April 2025 to negotiate on Trump's tariff policies.
"Technically, aside from using American investment in Indonesia, Indonesia will also have companies investing in America — it all depends on the discussions later," he explained on the same occasion.
Earlier, Secretary General of the Electronics Manufacturers Association (Gabel) Daniel Suhardiman said that if TKDN relaxation were applied across all sectors, the impact would be a decline in industrial utilisation, particularly for products purchased through the TKDN programme.
"And this regulatory uncertainty will create hesitation and diversion of electronics sector investment out of Indonesia. Naturally, manufacturers stand to lose business-to-government sales, both through tenders and e-Catalogue," he concluded.
The government plans to relax TKDN requirements, particularly for information and communication technology (ICT) product demands from the United States, as a bargaining tool to reduce reciprocal tariffs imposed by US President Donald Trump.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu said his office is confident that the loosening of TKDN or policy deregulation towards greater flexibility will not affect investments already established domestically.
"Not really — if, say, this TKDN relaxation happens, we can actually pursue fiscal extensification and other measures," Todotua told reporters at the Coordinating Ministry for Economic Affairs office on Monday (14/4/2025).
According to him, the risks or impacts of the planned TKDN relaxation can be anticipated through other protective policies, including expanding the scope of fiscal stimulus provision.
"So actually this strategy is still our thinking to open up the largest possible share," he said.
On the other hand, he also assured that the overhaul of TKDN policy would not impact investment from technology giant Apple Inc. in Indonesia.
"There is no impact — Apple's investment is still proceeding, with several projects already underway and several more in preparation," he explained.
Rather than leaving Indonesia, Todotua sees potential for US investors to enter the country, from the technology sector through to oil and gas. However, he was unable to elaborate further on the investments to be made domestically.
Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said an Indonesian government delegation would depart for the US from 16 to 23 April 2025 to negotiate on Trump's tariff policies.
"Technically, aside from using American investment in Indonesia, Indonesia will also have companies investing in America — it all depends on the discussions later," he explained on the same occasion.
Earlier, Secretary General of the Electronics Manufacturers Association (Gabel) Daniel Suhardiman said that if TKDN relaxation were applied across all sectors, the impact would be a decline in industrial utilisation, particularly for products purchased through the TKDN programme.
"And this regulatory uncertainty will create hesitation and diversion of electronics sector investment out of Indonesia. Naturally, manufacturers stand to lose business-to-government sales, both through tenders and e-Catalogue," he concluded.