Kadin: Import restrictions on domestically produced goods boost competitiveness

The Indonesian Chamber of Commerce and Industry (Kadin) believes that selective import restrictions on products that can already be produced domestically can provide space for industry to grow while simultaneously boosting competitiveness.

Saleh Husin, Vice Chairman of Kadin Indonesia for Industry, stated that import controls must go hand-in-hand with resolving various investment barriers to ensure that domestic production capacity continues to increase and can meet market demands.

According to a statement received in Jakarta on Monday, the heavy influx of imported products, particularly for goods that are already capable of being produced domestically, poses a challenge to strengthening national industrial resilience.

Therefore, industrial protection needs to be implemented by considering the specific conditions of each sector.

Saleh noted that the competition between local and imported products in the same market requires government attention. Domestic industries need space to grow when facing products from abroad.

However, he emphasised that import needs cannot be generalised. Several manufacturing sectors still require raw materials and capital goods from abroad because domestic producers are not yet able to meet all requirements.

“Therefore, import regulations need to be continuously evaluated and, if necessary, selectively strengthened, especially to prevent unfair competition without hindering the import of raw materials, capital goods, and products that cannot yet be supplied domestically,” said Saleh.

Resolving investment barriers, he continued, is an inseparable part of industrial protection efforts. Easier licensing, business certainty, and support for the development of production capacity are necessary so that industrial players have the incentive to increase investment in Indonesia.

He stated that the government possesses several instruments to maintain the resilience of national industry. These instruments should be used according to the conditions and characteristics of each sector so that protection policies do not focus solely on import restrictions.

“The instruments can include import controls, increasing TKDN (Domestic Component Level), safeguards, or incentives, but their implementation must be tailored to the characteristics of the product,” said Saleh.