Antara News·Indonesia·Friday, September 4, 2026 at 10:25 PM

Indonesia highlights three strategies to drive downstream investment

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Putu Indah Savitri, Yashinta Difa

Jakarta (ANTARA) - Indonesia highlighted strategic planning, streamlined execution and competitive incentives as three core strategies to drive downstream investment and accelerate economic growth across the archipelago.

Deputy Minister of Investment and Downstreaming Todotua Pasaribu said in his statement, Friday, that attracting sustainable capital requires ensuring that incoming investment remains competitive while fostering technological advancement.

"When we talk about the role of the Investment and Downstreaming Ministry, we are talking about strategic planning—how to execute effectively, and also incentives," Todotua noted.

He emphasized that foreign and domestic capital must be directed toward production facilities, technology transfer, research and innovation as well as mastering complex manufacturing processes.

Under its strategic planning framework, the ministry has mapped out opportunities targeting 28 commodities across eight priority sectors through its Strategic Investment Downstreaming Roadmap.

The initiative represents a potential investment pipeline of US$618.1 billion and holds the potential to create three million jobs.

To improve execution and business certainty, the government is continuously reforming various licensing policies, including implementing Government Regulation No. 28 of 2025 on Risk-Based Business Licensing and integrating services through the Online Single Submission (OSS) system.

The policy reforms aim to eliminate overlapping agency authorities, simplify permitting, and provide greater regulatory certainty for investors.

Complementing regulatory easing, Indonesia is rolling out an array of targeted fiscal incentives—including tax holidays, tax allowances, master lists and super tax deduction schemes—to attract high-value, sustainable downstream projects.

The strategy is already yielding clear economic results. Downstreaming investment realization reached Rp300.1 trillion (approximately US$19 billion) in the first half of 2026—accounting for 29.7 percent of total national investment and marking a 6.9 percent increase compared to the same period last year.

Foreign direct investment (FDI) served as the primary engine, contributing Rp212.8 trillion (US$13.4 billion) or 70.9 percent of total downstream realization, while domestic direct investment (DDI) contributed Rp87.3trillion (US$5.5 billion), or 29.1 percent.

As much as 75.7 percent of downstream investment—worth Rp227.3 trillion (US$14.3 billion)—was realized outside Java, demonstrating the sector's contribution to more equitable regional development.

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