ANNOUNCEMENT 27 Jul 2016

In July 2016, the government of Indonesia announced a change in the required local inputs to serve domestic customers.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: 01 Jan 2017 | Removal date: open ended
Still in force

Local sourcing

 On 27 July 2016, the Indonesian Ministry of Industry issued regulation 65/2016 updating the local content requirements on smartphones and tablets. The previous localisation requirement at 40% (cf. Related Measures) is planned to come into force on 1 January 2017.
The amendment does not strictly increase the local content requirements, as it offers different "schemes" for smartphone and tablet manufacturers to satisfy the provisions. It introduces the option to localise the software rather than the hardware components of the devices.
For instance under one scheme, creating a number of popular applications and games could reduce the hardware localisation required to 10% and the design and firmware localisation to 20%.
Also, the new regulation offers the reduction of the localisation restrictions depending on the size of foreign investment. In the case of investments worth at least 1 trillion IDR (ca. 77 million USD), the localisation requirement would be scrapped altogether.

Update on 13 July 2017

On 13 July 2017, the Ministry of Industry issued regulation 29/PER/M-IND/7/2017 (cf. Sources) replacing the previous regulation 65/2016. However, the changes in the regulation were minor and included in particular slightly adjusted local content valuations with respect to the individual parts of smartphones and tablets. Hence, this intervention continues to be classified as in force.

The new regulation came into force on 14 July 2017.

AFFECTED SECTORS