Indonesia's Ministry of Industry Issues New Regulation on Domestic Content Levels

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The Ministry of Industry has officially issued Ministerial Regulation No. 35 of 2025 to overhaul the mechanism for calculating and certifying the domestic content of ingredients (TKDN).The new regulations, which will go into effect on December 12, 2025, replacing the old ones from 2011 and 2022, are designed to enhance the competitiveness of the local manufacturing sector and attract investment.

Core reforms includeTKDN points will be awarded for manufacturing investment of 25% or more; R&D activities will be awarded a maximum of 20% additional points; BMP criteria will be simplified and 15 new optional indicators will be added; SMEs will be allowed to adopt the "self-declaration" method, and their TKDN points can exceed 40%; the validity period of certificates will be extended for five years. The validity period of the certificate has been extended to 5 years.

Supply Chain Analysisleave it (to sb)Three layers simplified to one, speeding up certification; clarifying for the first time"TKDN Whitewash."Definitions of violations such as, false documents; penalties includeRevocation of certificates, disqualification of LVIetc. The Minister of Industry said the new regulation aims to ensure that state budget spending creates double the value in the country, benefiting workers, businesses and the nation. The regulation is seen as an important step to promote the upgrading of the manufacturing sector and enhance the competitiveness of local industries.

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