TKDN More Flexible? Gaikindo Asks Government To Be Alert To Risks

The latest Hyundai Santa Fe at Hyundai Motor Manufacturing Indonesia. (Doc. Instagram/@lifeatmen)

JAKARTA - The impact of President Prabowo Subianto's intention to relax the rules for the level of domestic components (TKDN) has become a hot topic as well as controversial in recent weeks, including in the world of national automotive.

The Association of Indonesian Automotive Industries (Gaikindo) conveyed the need to consider risk studies in an effort to improve regulations regarding the level of domestic components (TKDN).

"If it can be streamlined, why not, so that then many investors come. So it's dynamic, but also a rational dynamic," said General Secretary of Gaikindo Kukuh Kumara as quoted by ANTARA, Monday, April 21.

"If there is indeed an improvement (improvement), why not, but the improvement is based on the risks that have been taken into account," he added.

President Prabowo Subianto on April 8, 2025 instructed ministers to make TKDN regulations that are more flexible and realistic in order to maintain industrial competitiveness.

"Maybe it will be replaced with incentives. Please help my assistants, my ministers, be realistic, just make TKDN realistic," he said.

Coordinating Minister for Economic Affairs Airlangga Hartarto on Friday (18/4) said that President Prabowo wanted the TKDN regulation to be revised to incentive-based.

The government has not informed the easing of the TKDN rules which are planned to cover any business sector.

So, it is not yet known whether the TKDN rules in the automotive business sector will be revised.

Kukuh assesses that the TKDN regulations in the automotive sector, which until now have been implemented, are quite good.

If the TKDN rules in the automotive sector will also be revised, he hopes that the revision of the regulations will be carried out by taking into account risk studies so that they do not actually have a negative impact on the growth of the domestic automotive industry.

Kukuh stated that Indonesia currently occupies a strategic position as one of the automotive production bases in Southeast Asia, and a step error in determining policies has the opportunity to encourage investors to leave.

"We see now there are four manufacturing sectors, starting from food and beverage moving to Thailand, then electronics moving to Vietnam, textiles and garment moving to Bangladesh," said Kukuh.

"Now it's just an automotive measure, if we make the wrong step, we don't have a reliable manufacturing base anymore, while we are now self-sufficiency in products," he concluded.