ANNOUNCEMENT 22 Aug 2017

On 22 August 2017, the Indonesia Ministry of Trade announced the procurement of Russian jets SU-35. Given the 2012 law on the defence industry (cf. Related state acts), this requires Russia to fulfil an 85% local content requirement or trigger an offset through the import of other Indonesian products.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 22 Aug 2017 | Removal date: open ended

Instrument unclear

Given law no. 16/2012, the Russian party agreed on 22 August 2017 to purchase Indonesian products worth 570 million USD, in order to "offset" the missing 50% of a local content requirement in the sale of Russian jets worth 1.14 billion USD. The remaining 35% (of a total 85% LCR) will be provided through maintenance and repair services in an Indonesian airbase.

The press release stated that Russia will "buy more than one export commodity, with options of processed rubber and derivatives, CPO and derivatives, machinery, coffee and derivatives, cocoa and derivatives, textiles, tea, footwear, processed fish, furniture, copra, and its derivatives, resins, paper, spices, defense industry products, and other products."