TKDN Rules Successfully Reduce Imports Of Cellphone Assembly Raw Materials

JAKARTA - The Ministry of Industry (Kemenperin) stated that the enforcement of regulations related to the Domestic Component Level (TKDN) of mobile phones has succeeded in reducing imports of cellphones. Including increasing the number of Indonesian mobile phone production to reach 97.5 million units.

"The application of TKDN is a form of regulation that is proven to be able to reduce import values effectively and strategically as seen in cellphone products. Cellphones that were originally imported as a whole can begin to be produced domestically. This is certainly in line with the Import Substitution program of up to 35 percent until the end of 2022 which was initiated by the government, ”said Industry Minister Agus Gumiwang Kartasasmita in his statement, Tuesday, April 27.

It is known, mandatory TKDN for HKT products (Mobile, Handheld Computers, and Tablets) with 4G / LTE technology is regulated in the Minister of Communication and Information Regulation Number 27/2015 concerning Technical Requirements for Telecommunication Tools and Equipment Based on Long Term Evolution Technology Standards, as well as calculation procedures TKDN in Regulation of the Minister of Industry Number 29/2017 concerning Provisions and Procedures for Calculating TKDN Value for Cellular Phones, Handheld Computers, and Tablet Computers.

However, the enactment of TKDN is obligatory not to completely cover imports, in which there are two schemes that allow the import of cell phones.

The first is the TKDN scheme for Certain Products (software), in which cellphone products are imported without having an Operating System installed which is then installed in Indonesia. Second, with the TKDN Innovation Center scheme, in which brand holders invest in making the Innovation Center in the country so that they can import cell phones as a whole.

The Director General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) of the Ministry of Industry, Taufiek Bawazier, said that the strategic application of TKDN for cellphones has proven to have a very positive impact on the country so that in the future it does not rule out if it will be applied to other strategic products.

"Through the application of TKDN, the domestic mobile phone industry can grow and open up a lot of job opportunities. In connection with the Government Import Substitution program, electronic and telematic products that have high import value are of course our concern so that later similar provisions can be applied, "said Taufiek.

In 2020, applications for imported TPP (Product Registration) for 4G / LTE products owned by the Ministry of Industry only reached 4.1 million units, dominated by Apple cellphones with 3.8 million units because they used the Innovation Center TKDN scheme. Thus, pure imports without domestic investment are only 300 thousand units (7.3 percent).

However, the decline in the import value of mobile phones was followed by an increase in the import value of mobile phone components used by the industry to make mobile phones at home. Responding to this, Taufik stated that the application of compulsory TKDN can still be maximized so that the domestic mobile phone industry can grow up to its components.

"We continue to evaluate and monitor the procedures for calculating TKDN as stipulated in the Minister of Industry Regulation No. 29/2017. The growth of the mobile phone industry should be followed by the emergence of the cellphone component industry so that the Indonesian mobile phone industry can have high competitiveness in the international market, "said Taufiek.

Meanwhile, based on the TPP Imports of the Ministry of Industry, in 2020 there was no record of imports from Vietnam, especially for South Korean brand cellphones. The importation of South Korean brand cellphones is carried out directly from South Korea using the TKDN scheme for Certain Products (software) with a total submission of only 30 thousand units.

On the other hand, mobile phones with 2G / 3G technology have not yet enforced the TKDN provisions so that imports originating from Vietnam are still recorded, although the numbers are relatively small when compared to the amounts produced domestically.

According to the Director of the Electronics and Telematics Industry of the Ministry of Industry, Ali Murtopo Simbolon, the absence of imports of mobile phones from Vietnam does not mean that the government prohibits or closes imports from a certain country.

The government pays attention to the trade balance of a product in determining regulations or policies to be taken.

“The trade balance performance of a product is an indicator for us in determining which products are our main concern. We are open to international trade, including imports, especially for products with a positive trade balance, "said Ali.