TEMPO.CO, Jakarta - Indonesian Industry Minister Agus Gumiwang Kartasasmita stated that the reform of the Domestic Component Level (TKDN) policy had been initiated long before United States President Donald Trump announced reciprocal tariff increases in early April 2025. He asserted that the discussion on reforming the TKDN calculation procedure had begun as early as February 2025. "TKDN policy reform is not caused by President Trump's reciprocal tariff policy or global trade war pressure, but by the needs of the domestic industry," said Agus in a written statement on Sunday, May 11, 2025.
TKDN is a measure used to calculate the extent to which a product's materials, components, or services originate from local resources. This percentage benchmarks the domestic industry's contribution to a specific product or project.
According to Agus, the TKDN reform includes formulating a fairer calculation of domestic components and simplifying the process for issuing TKDN certificates. He stated that this policy formulation has undergone a public review and is now in the finalization stage. "We always follow President Prabowo Subianto's guidance in developing the national manufacturing industry," he added.
He further emphasized that this reform is expected to create a more conducive business and investment climate, and at the same time, increase the manufacturing sector's contribution to the national economy.
Previously, President Prabowo instructed that the TKDN regulations should be more flexible to maintain Indonesia's industrial competitiveness. "We have to be realistic. If TKDN is forced, we will eventually lose competitiveness. Let TKDN be flexible," Prabowo said in an Economic Forum at Mandiri Building, Jakarta on Tuesday, April 8, 2025, as quoted by Antara.
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