Indonesia Plans to Revise TKDN Policy to Boost Foreign Investment

Published: Apr 21, 2025 17:32

Save

【Indonesia: Government plans to revise local component ratio policy to attract foreign investment】
On April 18, Indonesian President Prabowo Subianto proposed revising the domestic component ratio (TKDN) policy to lower localization thresholds and enhance policy flexibility, aiming to attract foreign investment, particularly in the electric vehicle and emerging technology sectors. The current policy mandates that government - procured goods meet a 25% localization rate and that enterprises’ welfare weight reaches 40%. However, these stringent rules have been blamed for curbing foreign investment enthusiasm in the new energy sector. In the automotive industry, the loosening of the TKDN policy will accelerate the layout of international automakers like Tesla and BYD in Indonesia and promote the localization of the electric vehicle supply chain. Previously, Indonesia extended the deadline for electric four - wheel vehicles to meet the 40% localization requirement from 2024 to 2026 to allow foreign investors more adaptation time. Nevertheless, local automakers worry that rapid opening - up may impact the traditional automotive ecosystem. GAIKINDO emphasized the need to protect the decades - long established fuel - vehicle industry chains of Toyota and Honda.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

10 hours ago

Beijing Launches 500-kV Power Project in Fengtai, Boosting Grid Resilience and Industrial Growth

On January 28th, the construction of the 500-kilovolt power transmission and transformation project in Fengtai, Beijing officially started. This project is the first newly-built 500-kilovolt power grid project in Beijing during the 15th Five-Year Plan period. It will significantly enhance the resilience and power receiving capacity of the southern Beijing power grid and provide reliable power support for Beijing to continuously optimize the investment structure and vigorously develop high-end, precise, and cutting-edge industries. The 500-kilovolt power transmission and transformation project in Fengtai, Beijing is a key project of Beijing's power grid during the 15th Five-Year Plan period and one of the "3 100" key projects in Beijing this year. It is constructed and managed by the State

10 hours ago

Shaanxi-Anhui UHV DC Project's 500-kV AC System at Hezhou Station Begins Operation After Trial Run

On February 1st, the 500-kilovolt AC system of the Hezhou Converter Station, the receiving-end station of the ±800-kilovolt UHV DC power transmission project from northern Shaanxi to Anhui, was officially put into operation after a 24-hour trial run.

10 hours ago

750-kV Power Line Connecting Northern to Central Shaanxi Fully Operational

On February 2nd, the 750-kilovolt power transmission and transformation project of the third passageway from northern Shaanxi to central Shaanxi was fully connected. The project starts from the 750-kilovolt Shuofang Substation in Shenmu City in the north and ends at the 750-kilovolt Bailuyuan Substation in Lantian County in the south. It has newly built a 1,271-kilometer line, passing through 18 counties (districts) in 4 cities including Yulin, Yan'an, Weinan and Xi'an.

10 hours ago