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Govt eases rules for distribution of Batam-made cell phones
The government has relaxed the regulations on the shipment of cell phones produced in Batam, Riau Islands, to other parts of the country
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he government has relaxed the regulations on the shipment of cell phones produced in Batam, Riau Islands, to other parts of the country.
The new regulation is expected to further attract global mobile phone manufacturers to set up factories on the island.
Under the revised version of Trade Ministry's 2012 regulation on the importation of cell phones, hand-helds and tablets, the relaxation will apply to gadgets produced locally in the free-trade zone in Batam will be revised. The move is an effort to attract foreign mobile phone makers to set up factories on the island.
With the new rule, the distributors of Batam-made cell phones will be exempt from the prerequisite to obtain registered-importer status as well as import-permit approval and undergo verification upon shipment.
Apart from that, unlike cell phones sourced overseas, which may only enter the domestic market through certain import gates, cell phones made in Batam will be able to enter the Indonesian market through any seaport or airport.
Due to its status as a free-trade zone, goods distributed from Batam to other parts of Indonesia are subject to import regulations, including import duties.
The government has already waived the import duties for mobile phones but the administrative requirements that have to be fulfilled by the distributors of mobile phones made in Batam still hamper their sales in other parts of the country.
The Trade Ministry's director general for foreign trade Partogi Pangaribuan said on Friday that with the easing of the procedures the mobile phone producers based in Batam would have equal treatment with cell phone makers operating in other parts of the country.
'Our goal is solely to encourage investment in our country, thereby we hope more investment will come in the future,' he said.
- Distribution of cell phones made in Batam to be exempt from import regulations
- Phones can be shipped to any part of the country
- Due to its free-trade status goods from Batam are subject to import regulations
In the past, Indonesia, the world's fourth most populous nation, has failed to attract major global phone makers like Blackberry and Samsung despite its lucrative cell-phone market. This is usually attributed to a less-than-conducive investment climate, such as higher import duties for components and a lack of fiscal incentives compared to Southeast Asian neighbors like Malaysia and Vietnam.
So far only one phone maker, PT Sat Nusapersada, has opened a facility in Batam. The electronics manufacturer started production in July and assembles completely-knocked down phones sourced overseas under the Ivo 4G brand.
Five other producers, besides Sat Nusapersada, operate in Indonesia and two new investors, South-Korean giant Samsung and China smartphone maker Oppo, are expected to establish facilities in the future.
Easing the shipping procedures from Batam may come with a risk as Batam is notorious for being a gateway for the import of duty-free handsets which are then smuggled to other parts of the archipelago.
Around 70,000 cell phones, particularly from China and Singapore, entered Batam each month last year, according to Batam Legislative Council. Most of the cell phones were illegally re-shipped to other parts of Indonesia.
Partogi rejected that concern, saying that the supervision would be sufficient to ensure the origin of the products, each shipment would be equipped with a product-registration stamp issued by the Industry Ministry and device certification from the Communications and Information Ministry.
The Indonesian Cell Phone Association's (APSI) head of technology division, Usun Pringgodigdo, welcomed the government's move to relax the rules on Batam-produced handsets, describing it as a breakthrough to help manufacturers who have made a debut in the industry.
