TKDN Policy Relaxation: Economic Observer Warns Potential Dangers For Domestic Industry

JAKARTA - Economic observer from Andalas University (Unand) Syafruddin Karimi assessed that the relaxation of the Domestic Component Level (TKDN) policy offered by the Indonesian government as part of the trade concession to the United States raises serious questions about Indonesia's commitment to the independence of the national industry.

According to him, TKDN is not just a number, but a symbol of the nation's determination to build domestic production capabilities, create jobs, and strengthen the national supply chain.

"When the government easily loosens these provisions without a clear equal reciprocity from the US side, what happens is not diplomacy, but a form of slowly deepening economic sovereignty," he said Wednesday, April 9.

Syafruddin explained that if you are not careful, this relaxation has the potential to worsen imported floods, harm local industries, and increase dependence on foreign products.

In the long term, he said, policies like this could hinder Indonesia's efforts to get out of the trap of middle-income countries.

"The government needs to be careful and dare to ensure that every economic concession must provide real and fair benefits for the national interest," he explained.

Syafruddin said that Indonesia must be able to balance strategic trade relations with the United States with protection against the interests of the domestic industry.

Although good trade relations are important, this should not sacrifice the foundation of national economic independence.

In addition, Syafruddin said the government needed to ensure that every trade agreement made would not only benefit one party, but also strengthen the competitiveness of local business actors, including MSMEs and the strategic industrial sector.

"Trade policy must be designed so as not to create dependence, but to encourage sustainable growth," he added.

Syafruddin said that in an increasingly complex geopolitical situation, Indonesia must build a strong bargaining position, based on domestic production strength and the courage to set fair conditions in every international agreement.