Indonesia eases local content rules to support domestic industry

Jakarta (ANTARA) - Indonesia's Industry Minister, Agus Gumiwang Kartasasmita, has announced a new regulation that allows the government to purchase products with at least 25 percent local content (TKDN), without factoring in the company's benefit weight (BMP).

The regulation, Presidential Regulation Number 46 of 2025, amends Presidential Regulation Number 18 of 2018 on Government Procurement of Goods and Services.

Under the previous regulation, the government was required to purchase and use a domestic product only if it had at least 25 percent TKDN and the combined TKDN and BMP value was at least 40 percent.

The new regulation states that if a qualifying product—a combined TKDN and BMP value of at least 40 percent—is unavailable or insufficient in quantity, the government may still purchase domestic products with at least 25 percent TKDN.

"The government is taking a more progressive approach to protecting the domestic industry," Kartasasmita said at the New Energy Vehicle Summit 2025 in Jakarta on Tuesday.

The minister explained that the regulation is designed to reinforce the obligation of the central government, regional administrations, and state-owned enterprises (SOEs) to prioritize domestic products, including in national design and engineering initiatives.

He also said the Ministry of Industry is reforming the TKDN certification process, cutting the processing time from three months to just 10 days.

"This TKDN reform is a contribution from the Ministry of Industry. Overall, the government is pursuing deregulation to accelerate and facilitate business activities," he concluded.