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Tech industry pushes back against plan to relax local content rules
Compliance with the regulation has often been cited as a barrier for businesses, as it forces companies to pour significant capital into local production infrastructure or partner with domestic suppliers to source their inputs locally, which can be more costly.
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A fully loaded container ship is seen at the port of Oakland as trade tensions escalate over United States tariffs, in Oakland, California on March 6, 2025. (Reuters/Carlos Barria)
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ocal manufacturers have pushed back against a plan to relax the local content requirement for the tech industry, warning that such a move could flood the domestic market with imports and hurt employment.
The Indonesian Telematics Device Industry Association (AIPTI), which represents hardware makers, software developers and app providers, said that the local content policy acts as a crucial non-tariff barrier that levels the playing field with foreign competitors in a market with relatively low import duties.
“If we let fully assembled handphones come in, it’s game over, assembly workers at foreign manufacturers like Samsung and Vivo could lose their jobs,” said AIPTI secretary-general Joegianto on Monday, as quoted by Bisnis.com.
“I don’t think the government would ever let that happen.”
Read also: Businesses wary on easing import, local content rules to coax US
Local content policy varies depending on the sector. Imported smartphones, tablets and laptops are required to have at least 35 percent minimum locally produced content, a threshold the government had planned to raise to 40 percent.
The policy is even more stringent in other sectors: up to 70 percent in electronics, 60 percent in medical devices and as high as 80 percent in automotive.
