A new paragraph added to Article 66 of Perpres No. 46 of 2025 defines the order of priority in government and BUMN/BUMD purchasing.

The regulation requires procurement decisions to favor products with TKDN or PDN over imported goods.

The hierarchy of government procurement priorities is as follows:

1. If products have a combined TKDN and Company Benefit Weight (BMP) score above 40 percent, only products with a TKDN score above 25 percent can be purchased.
2. If no products meet the combined 40 percent score, but some have a TKDN score above 25 percent, these products can be procured.
3. If no products meet the 25 percent TKDN threshold, procurement may include products with lower TKDN scores.
4. If there are no products with a TKDN certificate, PDN registered in the National Industrial Information System (SIINAS) may be purchased.

This replaces the previous rule under Perpres No. 16 of 2018, which allowed government institutions to immediately procure imported products if no local product met the combined 40 percent threshold.

The updated regulation now defines a sequential priority system for purchasing TKDN and PDN products, which was previously absent.

TKDN Reform Aligned with Presidential Directive on Industrial Development

“This new regulation aligns with the President’s direction during the Economic Roundtable at Mandiri Tower in mid-April. The President requested that TKDN policies be relaxed and converted into incentives. This PBJ regulation complies with that directive,” said Agus.

The Ministry of Industry is also reforming the TKDN policy, particularly the calculation method, to make the process simpler, faster, and less costly.

This reform is intended to increase the number of domestic industrial products that are certified and eligible for government procurement.

TKDN Reform Initiated Independently of Global Trade Developments

According to the Ministry, the TKDN reform was initiated before President Trump announced higher U.S. import tariffs in April 2025. Discussions on revising the TKDN calculation method began in February 2025.

Therefore, the TKDN reform is not a reaction to President Trump’s reciprocal tariff policy or global trade tensions, but rather based on the needs of domestic industry.

“We always follow the policies and directives of President Prabowo in building Indonesia’s manufacturing industry going forward,” stated Agus.

“The Ministry of Industry always has the mission and spirit to create opportunities for new businesses and to improve a conducive investment climate. Long before the deregulation steps were taken in response to U.S. tariff policy, we had already begun efforts to reform the TKDN policy, both in terms of fairer component calculations and simplified TKDN certificate issuance,” Agus emphasized.

The TKDN reform policy draft has been tested publicly and is now in the finalization stage.

“I hope the TKDN reform will further increase business and investment interest in the country, and enhance the manufacturing sector’s contribution to the national economy,” he added.

PHOTO: ANTARA/KEMENPERIN

This article was created with AI assistance.