Purbaya Prepares Regulation for Over 40% Local Content

Finance Minister Purbaya Yudhi Sadewa announced the government will adjust regulations to ensure companies with a Domestic Component Level (TKDN) above 40 percent have the same access as those in Special Economic Zones (KEK). The policy was conveyed during the 12th Debottlenecking Channel Session held by the Task Force for the Acceleration of Government Programmes to Support Economic Growth (P3M-PPE) on Thursday, 23 July 2026. “We will arrange it so that domestic producers who already have factories here have the same opportunity to compete in KEK areas,” Purbaya said in a press release. The session, chaired by Purbaya alongside Deputy for Economic Affairs at the Cabinet Secretariat Satya Bhakti Parikesit, was attended by business actors and relevant ministries and institutions to discuss investment barriers submitted through the debottlenecking channel. The government discussed two complaints from business actors. The first complaint came from PT Tigaraja Putra Persada, which is developing an integrated tourism area and cable car at Lake Toba. The company assessed that the project faces regulatory hurdles because railway regulations do not specifically regulate cable cars as a tourism facility. Additionally, part of the project location is situated in protected forest, production forest, and other use areas (APL). The government agreed on six follow-up actions, including coordinating to ensure the scope of the National Strategic Project (PSN) in the Lake Toba Super Priority Tourism Destination (DPSP) area, confirming the cable car category with the Ministry of Transportation, discussing the business scheme with the Ministry of Investment and Downstreaming/BKPM, and holding a follow-up meeting with PT Tigaraja Putra Persada and the Directorate General of Railways to discuss regulatory aspects, business classification, tariffs, and safety. The Ministry of Forestry will also facilitate the completion of the required permits. The second complaint was submitted by the Indonesian Electrical Equipment Manufacturers Association (APPI) and PT Schneider Indonesia. The companies highlighted an uneven playing field in KEK, where policies are more favourable to imported products than domestically produced goods. According to the complaint, local producers still bear import duty costs on raw materials of 5 to 15 percent, income tax, regional levies, and the cost of fulfilling the Indonesian National Standard (SNI). Meanwhile, imported goods entering KEK receive various facilities, including exemption from SNI obligations. APPI and PT Schneider Indonesia also highlighted that the regulation on the evaluation of the import master list has not been updated for six years.