Japan Invests US$1.4 Billion in Pharmaceuticals to Strengthen Active Ingredient Industry
The Ministry of Investment and Downstreaming/BKPM is facilitating a Japanese investment plan worth US$1.4 billion in the pharmaceutical sector to build an industry for active pharmaceutical ingredients (API) in Indonesia. This strategic step was taken in Jakarta on Tuesday (12/5/2026) to reduce dependence on imports of raw materials from China and India.
Strengthening the national health sector through the transformation of the domestic pharmaceutical industry has become a top priority for the government in attracting foreign capital. According to Ekonomi, this effort aims to direct investments towards strategic sectors beyond traditional manufacturing such as automotive and electronics.
Cahyo Purnomo, Director of Promotion for East Asia, South Asia, Middle East, and Africa at the Ministry of Investment and Downstreaming/BKPM, explained that the government has provided guidance on the important role of the health sector.
“The government has already provided guidance on how the health sector also plays an important role, including through various transformation processes,” said Cahyo Purnomo, Director of Promotion for East Asia, South Asia, Middle East, and Africa at the Ministry of Investment and Downstreaming/BKPM.
The major investment specifically targets domestic API production to break the chain of import dependence. In addition to pharmaceuticals, the government is encouraging Japanese investors to expand their portfolio into medical devices and health services through various fiscal incentives such as tax holidays and tax allowances in Special Economic Zones (SEZs).
The health sector now holds a strategic position in President Prabowo Subianto’s administration agenda to pursue an 8% economic growth target. Based on 2025 realisation data, investments in Indonesia nearly reached US$120 billion, with a target this year to increase to US$136 billion.
The health sector’s investment realisation in 2025 itself reached US$574 million, the highest figure in history. Japan is recorded as one of the largest investors in Indonesia’s health sector, closely following Singapore and South Korea.