Government Responds to Business Concerns, Affirms Support for Local Products Amid Import Regulations


Amidst concerns raised by business entities regarding the recent tightening of import regulations outlined in Minister of Trade Regulation (Permendag) No. 36/2023 on Import Policies and Regulations, the Ministry of Trade (Kemendag) has clarified its stance.

The Acting Secretary General of Kemendag, Suhanto, affirmed that the government’s intention is not to restrict or intensify imports but rather to encourage the utilization of domestic products. In a statement to the media at the Kemendag office on Friday, February 2, 2024, Suhanto highlighted the importance of being selective, stating, “If we have quality domestic products, there’s a strong rationale for favoring them over imports.”

Addressing concerns about the potential impact on micro, small, and medium enterprises (MSMEs), Suhanto emphasized that the government is committed to preventing the flooding of imported goods that could adversely affect local businesses. To support this commitment, the government issued Permendag No. 36/2023.

Suhanto further underscored the regulatory measures as a means to curb illicit practices often used to smuggle illegal imports into Indonesia. He expressed the government’s limitations in scrutinizing cross-border goods and the necessity of implementing stringent regulations to address this challenge.

Contrary to worries expressed by entrepreneurs, particularly the Chairman of the Indonesian Retailers Association (Hippindo), Budiharjo Iduansjah, who suggested that import restrictions might hinder the growth of the retail sector, Suhanto asserted that these policies aim to strike a balance between safeguarding local businesses and meeting consumer demands.

Acknowledging the potential attractiveness of overseas shopping due to lower prices and a wider range of products, Suhanto emphasized the need to prioritize domestic products to ensure the resilience and growth of Indonesian industries.

Minister of Trade (Mendag) Zulkifli Hasan, through Permendag No. 36/2023, has reshaped the oversight of import policies, transitioning from post-border to border control. Additionally, the regulation eases the import process for goods sent by Indonesian Migrant Workers (PMI) and outlines facilities for importing raw materials by industries designated as Authorized Economic Operators and primary customs partners.

The issuance of Permendag aligns with President Joko Widodo’s directive to tighten control over the import of consumer goods and finished products. The rationale behind this move is to mitigate competition with local industries and minimize adverse effects on MSMEs, thereby fostering a more resilient domestic economic landscape.