Antara News·Indonesia·Saturday, September 26, 2026 at 12:46 PM

Indonesia pushes domestic products to strengthen industrial ecosystem

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Ahmad Muzdaffar Fauzan, Yashinta Difa

Jakarta (ANTARA) - Indonesia’s Industry Ministry is optimizing the use of domestic products to drive increased value-added in the national industry while strengthening production capacity, supply chains, investment and labor absorption.

Industry Minister Agus Gumiwang Kartasasmita emphasized that leveraging Indonesia's vast internal market is crucial for building a resilient industrial ecosystem and enhancing global competitiveness.

"Utilizing domestic products is part of the effort to build an increasingly strong industrial ecosystem,” Minister Agus said in a statement on Saturday.

“When national industrial products secure a wider market, production capacity can be utilized more optimally, thereby generating a multiplier effect on investment, labor absorption and the strengthening of domestic supply chains," he added.

According to Agus, every Rp1 spent on domestic products can generate an economic impact of Rp2.2 on the national economy.

Meanwhile, approximately 78.39 percent of national manufactured products are destined for the domestic market, with the remaining 21.61 percent going to export markets.

With household consumption reaching Rp12,834.8 trillion (approximately US$717 billion) in 2025 across a population of 284.44 million, officials see significant room to absorb domestic output—especially given that capacity utilization in the non-oil and gas manufacturing sector stood at 61.8 percent last year.

With a population of 284.44 million people, household consumption in Indonesia reached Rp12,834.8 trillion (US$779.2 billion) from January to December 2025, offering ample room to increase the penetration of national industrial products.

The ministry’s Head of the Center for the Enhancement of Domestic Product Use (P4DN) Kris Sasono Ngudi Wibowo stated that this opportunity is supported by various industrial capacity that still holds potential for optimization.

The utilization rate of the non-oil and gas manufacturing industry stood at 61.8 percent in 2025.

"This substantial consumer base provides room for national manufactured products to expand within the domestic market," Kris said.

To support this expansion, the government is strengthening the domestic industry through the Domestic Component Level (TKDN) policy.

As of September 2, 2026, more than 57,000 products from over 5,600 industrial companies had obtained TKDN certification, giving them priority access in public and corporate procurement.

State-owned pharmaceutical giant Bio Farma Group is among the high-profile companies implementing the policy.

The company holds 29 certificates covering vaccines, enoxaparin and diagnostic kits, with local content scores ranging from 44.28 percent to 95.03 percent, as well as a Company Benefit Weight (BMP) of up to 15 percent.

Speaking at the Industrial Festival x Halal Indo 2026 in Tangerang on Friday (September 25), Bio Farma President Director Evi Sylvia stressed that localized production extends beyond manufacturing volume.

“Through technological mastery, increased TKDN levels and the application of quality and halal standards, the resulting products can meet national needs while remaining competitive in the global market,” Sylvia said, highlighting the company’s adherence to the Halal Product Assurance System (SJPH).

The push for localized supply chains is also taking root in the consumer goods sector, where brands are balancing local sourcing with competitive pricing.

CEO and Co-Founder of lifestyle brand Torch, Ben Wirawan, noted during the panel that integrating local raw materials into a structured product development framework is essential to maintaining high quality while keeping consumer prices competitive.

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