Indonesia's Ministry of Industry Issues Regulation on The Import of Electronic Products

Industrials Author: EqualOcean News, ChenZhiheng Apr 12, 2024 02:09 PM (GMT+8)

The Ministry of Industry of Indonesia has issued the Minister of Industry Regulation No. 6 of 2024, which deals with the regulation of the import of electronic products. According to this regulation, the import flow of electronic products will be regulated.

Priyadi Arie Nugroho, Director of Electronics and Telematics Industry (IET) at the Ministry of Industry, emphasized that the policy was developed to create a favorable business environment for producers investing in Indonesia. Citing an official statement from the Ministry of Industry on Tuesday (September 4, 2024), he explained, "This regulation is a concrete effort by the government to create investment certainty for industry players in Indonesia, especially in the context of domestic production of electronic products.

The implementation of this import restriction is also a follow-up to the President's previous instruction to achieve a balanced trade position in electronics by 2023. Thus, based on the consideration of the proposal and the development status of the domestic electronics industry, 139 categories of electronic tariffs are provided for in Permenperin 6/2024, of which 78 tariffs that category of details apply to the import authorization (PI) and the surveyor's report (LS), while the other 61 tariff positions apply only to the surveyor's report (LS).

"Some of the products in the 78 tariff categories include air conditioners, TVs, washing machines, refrigerators, fiber optic cables, fridges, laptops and several other electronic products," Priyadi said.

In addition, Priyadi said his party should be clear that such trade restrictions on the import of electronic products have never been implemented before. He explained, "It is important to emphasize that the issuance of the electronics import trade policy does not mean that the government is against imports, but rather to protect Indonesia's good domestic business and industrial environment, especially for domestically produced products."

With the introduction of Permenperin 6/2024, it is expected that domestic producers in Indonesia can capitalize on the demand for electronic products, thus further increasing production capacity and diversifying product types. Meanwhile, for electronic manufacturing services (EMS) or original equipment manufacturers (OEMs), the bill also provides an opportunity for local Indonesian manufacturers to collaborate with international brands that do not yet have production lines locally.

"Meanwhile, for importers, there is certainty in the distribution or sale of imported goods in the country," Priyadi explained.

According to relevant statistics, the production capacity of air-conditioning products in Indonesia in 2023 was 2.7 million units, with actual sales of about 1.2 million units. This means that the production utilization rate is only 43%. Although it is very unfortunate, the import of air conditioning products in 2023 will reach 3.8 million units, according to the data of the measurement report.

Therefore, it is expected that this bill on import restrictions can increase the utilization rate of Indonesia's air conditioner production. "The Regulation of the Minister of Industry is also welcomed by domestic electronics manufacturers. The government can see this from several official letters received by the Domestic Producers Association, which express their support for the introduction of the regulation." Priyadi concluded.

Noval Jamalullail, Chairman of the Indonesian Cable Factory Association (APKABEL), said that the enactment of Permenperin 6/2024 is the best solution to support the domestic cable industry, especially fiber optic cable manufacturers. This is because it will revitalize the production of the country's fiber optic cable industry to be able to actively meet the national demand for the construction of telecommunication facilities and internet networks throughout Indonesia," he explained.

Noval said that the Minister of Industry has also provided new hope for the development of the fiber optic cable industry in the country. In addition, the Indonesian fiber optic cable industry is currently qualified in terms of capacity and capability, having been able to manufacture various types of small and large-size fiber optic cables. Whether for use inside buildings, for aerial and terrestrial purposes, or for pipelines and cables at sea (submarine cables).

The introduction of this regulation for China to Indonesia's exports of home appliances and all kinds of electronics manufacturing enterprises is undoubtedly a huge blow, but if companies can seize the opportunity to achieve localization of factories in Indonesia, may be able to obtain a more favorable first-mover advantage.