The Minister of Industry recently officially issued the Minister of Industry Regulation No. 35/2025, comprehensively reforming the Domestic Component Level (TKDN) certification system. The new regulation aims to simplify procedures, attract investment, and support President Prabowo's development plan.
Four key reform highlights include: companies building factories in Indonesia and hiring local employees automatically receive a 25% TKDN baseline score, with R&D investments eligible for an additional 20% bonus.
In addition, certification time is shortened from 22 working days to 10 working days, SMEs can use a "self-declaration" mechanism and obtain certification within 3 days; the calculation method based on total cost is abolished (except for the service sector), the certificate validity period is extended to 5 years, and companies are also allowed to voluntarily label TKDN values on their products.
The Minister of Industry emphasized that the new regulation is not driven by external pressure but aims to improve the business environment and promote local industry development. This regulation applies to companies participating in government procurement projects, ensuring that national spending truly benefits Indonesia's economy. The previous Minister of Industry Regulation No. 16/2011, which had been in effect for 14 years, was considered unable to meet current industry demands.