Kadin: Global Conflicts Drive Companies to Relocate to Indonesia
JAKARTA - The Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Anindya Bakrie, sees increasing opportunities for factory relocations to Indonesia as conflicts rage in West Asia.
He assesses that geopolitical tensions are driving global companies to seek new, more stable production locations.
“Because it must also be viewed from a geopolitical perspective, certainly with this war occurring, there are many opportunities that we always mention in terms of relocations,” said Anindya when met at the Kadin Tower in Jakarta on Friday (24/4/2026).
A similar pattern is seen to be emerging again. Companies are seeking alternative supply chains outside the conflict-affected regions.
“Now this relocation has increased further because they want to find other supply chain options besides the Middle East option,” he stated.
The relocation is considered to have the potential to bring in foreign exchange. These fund flows are expected to help support the rupiah exchange rate.
Anindya also highlighted the role of Indonesia’s trade agreements. Several agreements are seen to provide ease for companies to make Indonesia a production and export base.
Those agreements include the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA), the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), as well as other trade cooperations such as the Reciprocal Trade Agreement (RTA) with the United States and the Free Trade Agreement (FTA) with the Eurasian Economic Union.
“That certainly with the tensions between America-China and the Middle East, they are looking for places. Well, places that are, so to speak, ready to use, so they can hit the ground running,” said Anindya.
The current global situation is triggered by conflicts involving Israel, the United States, and Iran. Attacks that have occurred since the end of February have triggered escalation in the region.
The closure of the Strait of Hormuz has further worsened the situation. That route is the main distribution path for oil and petrochemical products from the Gulf region.
The impact is immediately felt in the rising global energy prices. Supply chain disruptions are also pressuring industries in various countries.