Indonesia’s Ministry of Industry (Kemenperin) has voiced strong support for the Directorate General of Customs and Excise's move to implement stricter monitoring in the country’s Bonded Logistics Centers (PLB) and Bonded Zones (KB). This policy aims to reduce the influx of low-priced imported finished goods, which have been negatively impacting the competitiveness of domestic industries.

Need for Tightened Monitoring at PLBs

Febri Hendri Antoni Arief, spokesperson for Kemenperin, welcomed the decision, particularly emphasizing the need for tighter controls at PLBs. He expressed concerns over the use of PLBs as a channel for both legal and illegal goods to enter Indonesia. These imported products, mainly from countries with excess production, have flooded the domestic market at cheap prices, damaging local manufacturing industries.

“We’ve observed how cheaply priced imported products, sourced from countries with overproduction, can be purchased via e-commerce platforms and rapidly reach Indonesian consumers. Some of these products are believed to already be stored in PLBs,” Febri stated in Jakarta on May 21, 2025.

The Impact of Imported Goods on Local Industries

Febri stressed that strict monitoring is necessary because imported goods passing through PLBs do not comply with Indonesia’s National Standards (SNI) or other required regulations. Moreover, products entering through PLBs are exempt from certain restrictions, such as the prohibitions or limitations (Lartas) imposed on other imports, further harming the local market. Tightening the oversight on these imports would prevent the influx of goods that harm domestic industries.

Concerns About PLB's Role in Attracting Investment

The spokesperson also questioned remarks made by the Director General of Customs and Excise, Askolani, who stated that PLBs were meant to attract investment. Kemenperin’s position is that PLBs could actually discourage foreign investors from establishing manufacturing operations within Indonesia.

“If they can simply import finished goods, why should they invest in setting up industries here?” Febri remarked. He suggested that relying on PLB imports might pressure local manufacturers, potentially leading to reduced production or even factory closures, resulting in job losses.

Challenges in Bonded Zones (KB)

The Ministry has also raised concerns about the activities within Bonded Zones (KB). These zones, which are meant to facilitate export and import processing, have become areas where goods initially designated for export are redirected to the domestic market, creating an unfair advantage for companies within the zones.

“It’s unfair for industries outside the KB to compete against products from the KB, which benefit from import tax exemptions and are sold in the domestic market,” Febri explained. This issue was addressed in discussions with the Indonesian Parliament’s Commission VII, which supported refocusing the function of KB to prioritize export, in line with its original purpose.

Strengthening Domestic Manufacturing Through Regulations

Kemenperin continues to strengthen policies designed to protect the domestic market from the growing presence of imported goods. These include the enforcement of mandatory SNI, improving monitoring of imported products, and encouraging the application of Domestic Component Level (TKDN) standards in various key sectors.

“Domestic demand for industrial products is substantial, accounting for about 80% of total manufactured goods, while the remaining 20% is exported. This represents a significant opportunity that must be preserved for local industries,” Febri asserted.

Proposal for New Import Entry Points

In addition, Kemenperin has proposed shifting import entry points to eastern Indonesia, especially for products already produced domestically. The Ministry has suggested using ports in Bitung, North Sulawesi, and Sorong, Papua Barat, to help prevent competition from imported goods and protect local industries.

PHOTO: FREEPIK

This article was created with AI assistance.