Japan Plans US$1.4 Billion Pharmaceutical Investment in Indonesia

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 active pharmaceutical ingredients (API) industry in Indonesia on Tuesday (12/5/2026). This strategic step is aimed at reducing the high dependence of the national pharmaceutical industry on imported raw materials, which have been dominated by supplies from China and India, as reported by Ekonomi. Cahyo Purnomo, Director of Promotion for East Asia, South Asia, Middle East, and Africa at the Ministry of Investment and Downstreaming/BKPM, explained that strengthening the health sector is now a priority in the domestic industrial transformation. The government is directing foreign capital to the strategic health sector, while continuing to pursue increased investments in traditional manufacturing sectors such as automotive and electronics. “The government has 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 statement was made at a seminar with the Japan International Cooperation Agency (JICA) in Jakarta to attract more Japanese investors to expand their portfolios to medical devices and health services. To support the realisation of this investment, the government has prepared a package of fiscal incentives such as tax holidays, tax allowances, and tax reductions in special economic zones (SEZs), as well as administrative licensing facilitations. The health sector is one of the main pillars in the 8% economic growth target under President Prabowo Subianto’s administration, with 2025 health investment achievements recording the highest ever. Ministry data shows that health sector investment realisation in 2025 reached US$574 million, where Japan positions itself as one of the largest investors after Singapore and South Korea. The government now targets a total investment of US$136 billion for this year, projected to continue increasing to reach US$213 billion by 2029.