Indonesia's new TKDN policy accelerates rise of local manufacturing

The Ministry of Industry's push for local component level TKDN policy reforms aimed at strengthening the country's manufacturing sector is a response to the President's deregulation initiatives and is not influenced by external pressures.Since February 2025, the Ministry of Industry has been working on the reform and the regulations are now in the final stage. Compared with the old regulations, the new regulations optimize the TKDN certificate process, promising a simpler, less expensive and faster process. At the same time, the new calculation method is simpler, the processing time is shortened and the cost is reduced. The aim is to prompt more domestic industrial products to obtain TKDN certificates, to increase the purchasing willingness of the government departments and state-owned enterprises, etc., and thus to promote the development of the domestic manufacturing industry. President Prabowo signed a presidential regulation changing the rules for the procurement of government goods and services. The new regulation clarifies the priority order of procurement products for government agencies, SOEs, etc.: when the combined score of TKDN and Business Benefit Weighting (BMP) exceeds 40%, the government can only procure products with a TKDN higher than 25%; products without a score of more than 40% but with a TKDN of more than 25% can be procured; products with a TKDN of less than 25% can be procured; products without a TKDN of more than 40% can be procured; products without a TKDN can be procured; products without a TKDN can be procured. Procurement; if there are no TKDN certified products, domestic products registered in the State Industrial Information System (SIINAS) may be procured. This provision replaces the old provision that allowed direct procurement of imported products if the product did not meet the comprehensive score requirement, making the government's procurement priority for local products clearer. The industry hopes that the new regulation will be implemented as soon as possible, believing that it will provide convenience to enterprises and reflect their urgent need to simplify the approval process and facilitate their development.