Businesspeople have called on the government to involve them in drafting a regulation on import limitation of raw materials to ease the country's current account deficit (CAD) because many of their factories still rely on imported raw materials.

In an effort to curb imports, the government plans to issue a regulation that among others will impose a 7.5 percent income tariff on imports of consumer goods and raw materials. The government is currently assessing 500 imported items that may be replaced by local products.

Association of the Indonesian Food & Beverage Producers (GAPMI) secretary-general Adhi Lukman said the import limitation of raw material was counterproductive.  

“The industry also needs a global value chain. If the import is limited, we will also limit the products,” Adhi said as quoted by kontan.co.id. on Wednesday, adding that such limitation should be only imposed on finished goods.

He called on the government to be careful in drafting a regulation on import limitation because it could hamper investment and the business climate.

Adhi also hoped that the government would invite businesspeople to discuss the new regulation. He said certain food and beverage ingredients, like wheat, flour and sugar, as well as milk, salt and soybeans, were still imported.

Meanwhile, head of the research and development department of the  Indonesian Pharmacological Business Association, Vincent Harijanto, said 90 percent of medicine material was still imported and therefore, any import limitation would cause problems.

Instead of limiting raw material import, the government needs to encourage pharmacological companies to invest in manufacturing raw materials. “But it needs incentives to invest [in raw materials for medicine],” he added. (bbn)