From rural roots to international markets: Indonesian MSMEs go global

Jakarta (ANTARA) - Products from rural areas across Indonesia are increasingly setting their sights on the international market, moving beyond traditional boundaries to supply buyers worldwide.

Micro, small, and medium enterprises (MSMEs) are no longer relying solely on domestic consumers, expanding into foreign markets through systematic export facilitation programs.

This dynamic trajectory reflects the core policy direction of the trade sector under the administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka.

The government's trade strategy focuses on two parallel objectives: maintaining domestic price stability for essential goods while aggressively expanding local business access to international commerce.

Despite persistent global economic friction and complex geopolitical shifts, national trade authorities continue working to sustain export growth and widen market opportunities for domestic producers.

Trade Minister Budi Santoso stated that Indonesia's trade performance has demonstrated positive growth momentum, characterized by stable staple prices and solid export expansion.

"In the trade sector, despite significant global challenges, performance continues to show positive growth," Budi told ANTARA in Jakarta.

Budi emphasized that trade management extends far beyond simply increasing foreign shipment volumes.

The government remains obligated to guarantee the availability of basic commodities at affordable prices for domestic consumers while simultaneously creating wider pathways for local goods to compete globally.

Exports grow

Official figures from Statistics Indonesia (BPS) demonstrate this upward trajectory in national trade figures.

Total national exports throughout 2025 reached US$266.51 billion recorded in 2024.

This positive expansion sustained its momentum through the January–August 2026 period, with national export value reaching US$193.64 billion, or a 4.74 percent increase year-on-year.

During those same eight months of 2026, Indonesia's overall trade balance recorded a trade surplus totaling US$7.25 billion.

Minister Budi described this continuous surplus as a clear signal that national trading activities maintain fundamental resilience despite volatile international conditions.

However, trade officials recognize that long-term economic stability requires avoiding over-reliance on traditional raw commodities or a limited group of destination countries.

Broadening export destinations and raising the value-added component of Indonesian products represent vital steps toward boosting long-term international competitiveness.

In this context, international trade agreements serve a key strategic role by removing foreign tariff hurdles, reducing non-tariff barriers, and improving overall market access.

Indonesia has currently implemented 25 international trade agreements, while 13 additional trade deals remain under active negotiation.

Ongoing diplomatic efforts include finalizing a comprehensive trade arrangement with the Gulf Cooperation Council (GCC) in the Middle East and negotiating ties with the South American Mercosur bloc.

Minister Budi explained that expanding market access does not always require waiting for multi-country regional agreements, which often take years to finalize and ratify.

Bilateral negotiations offer a faster, highly practical approach to opening target markets for domestic products.

He cited Indonesia's bilateral trade arrangement with the United Arab Emirates (UAE) as a concrete success story in expanding market penetration across Middle Eastern networks.

"The task ahead is essentially how we can increase the number of trade agreements and open up market access, while simultaneously enhancing the competitiveness of domestic products," Budi asserted.

MSMEs go global

Wider access to foreign buyers is designed to deliver tangible economic advantages to small-scale business operators who previously lacked direct export channels.

Through the targeted Export Village (Desa Ekspor) initiative, the Trade Ministry actively identifies superior regional products from outlying districts and introduces them to international buyers.

Minister Budi stressed that direct exporting is no longer restricted to large corporations or major urban manufacturing centers.

"Many in rural areas are already exporting. Exporters are not found only in cities; they are also in villages. It is not just large enterprises—MSMEs can export, too," Budi stated.

Public-private collaboration plays a vital role in expanding operational capacity for small producers.

At the Trade Expo Indonesia (TEI) 2026, officials witnessed the signing of 10 separate memoranda of understanding (MoUs) worth Rp69 billion (approximately US$3.82 million) involving mentors and international commercial partners.

These cooperative efforts assist MSMEs in improving product quality, expanding factory capacity, and establishing reliable distribution networks.

Performance data highlights the effectiveness of these efforts, with total exports generated through the "MSMEs CAN Export" (UMKM BISA Ekspor) program reaching US$347 million between January and August 2026.

However, maintaining an international presence requires small businesses to consistently meet destination country technical standards, safety protocols, and supply schedules.

Consequently, government support for MSMEs combines market access expansion with continuous technical coaching and operational capacity building.

Downstreaming

Besides market access, industrial downstreaming remains a fundamental policy tool for increasing the economic value-added of national products.

By processing raw materials into finished or semi-finished goods prior to shipment, Indonesia captures significantly higher economic returns on international markets.

"The downstreaming program initiated by the President is highly appropriate. Through downstreaming, we gain strong competitiveness, driven by improvements in product quality," Budi noted.

Industrial downstreaming enables domestic manufacturers to raise production standards, develop technical expertise, and meet diverse global demand requirements.

Simultaneously, the Trade Ministry continues prioritizing domestic market stability to safeguard consumer purchasing power and maintain smooth commerce across all provinces.

The ministry collaborates closely with line agencies, regional governments, distributors, and suppliers to ensure equitable supply distribution.

"Price stability is currently well-controlled. We continue to collaborate with other ministries, business players, distributors, and suppliers," Budi explained, noting that staple food prices have remained stable since last year's holiday season.

As the Prabowo-Gibran administration enters its third year, the Trade Ministry aims to sustain this balance between export expansion and domestic market stability.

Through market diversification, downstreaming, MSME empowerment, and price management, trade policies aim to deliver inclusive growth across the Indonesian archipelago—from urban centers to the most remote villages.

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