TKDN Rules For Government-BUMN Expenditure Terbit, Minister Of Industry Agus: Fresh Wind For Industry

JAKARTA - The Ministry of Industry (Kemenperin) and industry players appreciate the issuance of a new Presidential Regulation (Perpres) on Government Procurement of Goods and Services (PBJ). The Presidential Regulation is Presidential Decree Number 46 of 2025 concerning the Second Amendment to Presidential Regulation 16/2018 concerning Government PBJ.

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said the new regulations regulate the obligations of the central, regional, BUMN and BUMD governments to buy products that have Domestic Component Levels (TKDN) and Domestic Products (PDN).

"We and industrial companies really appreciate Mr. Prabowo Subianto for signing Presidential Decree No. 46 of 2025 and is issuing it. This regulation is a breath of fresh air for the industry amid the current pressure of domestic demand, especially for industries that produce products purchased by the government and BUMN/BUMD," Agus said as quoted from his written statement, Thursday, May 8.

The Ministry of Industry and industry players also appreciate the emergence of new verses in Article 66 of Presidential Decree No. 46 of 2025, which regulates the priority of government spending and BUMN/BUMD. In the new regulation, the government is obliged to prioritize buying TKDN or PDN products compared to imported products.

The priority order of government spending on TKDN and PDN products in accordance with article 66 of Presidential Decree No. 46 of 2025 is as follows:

1. If there are products that add up their TKDN and Company Benefit Weight (BMP) scores of more than 40 percent, what the government can buy through PBJ is products that have TKDN above 25 percent;

2. If there are no products that add TKDN and BMP scores above 40 percent, but there are products that have TKDN scores above 25 percent, products that have TKDN scores above 25 percent can be purchased by the government through the Government PBJ;

3. If there are no products that have TKDN above 25 percent, the government can buy products with TKDN lower than 25 percent;

4. If there are no TKDN certified products, the government can buy PDN which is recorded in the National Industrial Information System (SIINAs).

Agus assessed that the new regulation improved the previous regulation, namely Presidential Decree No. 16 of 2018 concerning Government PBJ. In the Presidential Regulation, the government can directly buy imported products when the domestic industry has not been able to provide products with a sum of TKDN and BMP scores above 40 percent.

The new regulation also regulates the priority order of government spending on TKDN and PDN products that have not been regulated in the old regulations. According to Agus, the regulation is in line with President Prabowo Subianto's directives in Economic Facilities in mid-April.

"The president requested that the TKDN policy be relaxed and converted into incentives. This PBJ regulation is in accordance with the President's directives," he said.

The Ministry of Industry is committed to reforming TKDN policies, especially policies related to TKDN calculation procedures to make it simpler, shorter times and cheaper. This step aims to make more domestic industrial products have TKDN certificates and are purchased by the central, regional, BUMN and BUMD governments.

He added that the Ministry of Industry had started reforming TKDN policies long before President Donald Trump announced an increase in import rates to the United States in early April 2025. Agus and the Ministry of Industry have started discussing TKDN calculation procedures reforms since February 2025.

According to Agus, the TKDN policy reform was not caused by President Trump's reciprocal tariff policy or pressure due to the global trade war, but based on the needs of Indonesia's domestic industry.

"We always follow President Prabowo's policies and directions in building Indonesia's manufacturing industry in the future," said Agus.

In addition, according to Agus, his party always has a mission and is enthusiastic about opening up the greatest opportunity for the creation of new businesses and increasing the conducive investment climate.

"Long before the deregulation step was taken, the government responded to the United States tariff policy. We have started efforts to reform the TKDN policy, both in terms of the formulation of calculating domestic components, which is more just and simplifies the business process for issuing TKDN certificates," he explained.

The TKDN reform policy formulation has been carried out by public trials and is currently in the finalization stage. "I hope that TKDN reform in the future will increase business interest and investment in the country and increase the contribution of the manufacturing sector to the national economy," he added.