By: Sabrina Natasya )*
The government continues to take strategic steps to maintain the competitiveness of local products to prevent mass layoffs amidst global economic challenges and increasingly fierce free market competition. Through various fiscal policies, industrial incentives, and increased use of domestic products, the government is striving to ensure that the national industry remains vibrant, sustainable, and able to absorb a large workforce.
One important step that has attracted public attention is the implementation of a 0% import duty rate on certain imported products from trading partner countries such as the United States (US). This policy has raised concerns about a potential decline in state revenue. According to Prianto Budi Saptono, Executive Director of the Pratama-Kreston Tax Research Institute, the overall impact on the 2025 State Budget is relatively small. He emphasized that the import duty revenue target in the 2025 State Budget is only IDR 52.96 trillion, or approximately 0.21% of the total tax revenue target of IDR 24,909 trillion.
The reduction in import duty rates can be offset by increased revenue from other taxes, such as Income Tax Article 25/29 (Corporate Income Tax), Import VAT, and Import Income Tax Article 22. Local importers remain responsible for import duties, not foreign businesses. Furthermore, Prianto emphasized that the 0% import duty policy is part of a mutually beneficial bilateral trade strategy. In addition to paving the way for exports of Indonesia’s leading commodities, such as palm oil, to the US market, this policy also provides legal certainty for businesses.
Labor-intensive sectors such as the garment and footwear industry, which employ significant labor, also benefit from easier access to imported raw materials at lower production costs. This can create new jobs, encourage industrial relocation to Indonesia, and encourage long-term investment. This is particularly important in maintaining export markets and preventing mass layoffs in labor-intensive sectors.
The government’s efforts to maintain the competitiveness of national industry are also evident in regional policies. The Jakarta Provincial Government, for example, is actively promoting the use of domestic products as a form of support for local industry. Elisabeth Ratu Rante Allo, Head of the Jakarta Department of Industry, Trade, Cooperatives, and Small and Medium Enterprises (PPKUKM), stated that her agency is implementing an industrial sector control strategy to prevent layoffs.
Layoffs in several industries signal unfavorable developments. Therefore, the company is increasing the use of domestic products through an e-order system for meeting consumption and the use of e-catalogs for procurement of goods and services.
This concrete step is realized through the Business Matching program , where the Jakarta Provincial Government matches government procurement needs with domestic producers certified by the Domestic Component Level (TKDN). This activity aims to accelerate the implementation of the Increased Use of Domestic Products (P3DN) program and serve as a promotional tool for local products.
Furthermore, the government is utilizing the National Industrial Information System (SIINas) to collect industry data from business actors as a basis for formulating pro-industry policies, ranging from raw material guarantees and protection against imported goods to fiscal and non-fiscal incentives. Ratu stated that SIINas is expected to be a tool for more precise and expeditious policy-making, supporting a healthy and competitive industrial climate.
Meanwhile, at the digital market level, the role of e-commerce platforms in strengthening the position of MSMEs and local brands is becoming increasingly crucial. According to the latest E-Commerce Seller Satisfaction 2025 research from Ipsos Indonesia, MSMEs are now looking not only for popular platforms but also for ones that truly support their business growth sustainably.
Ipsos Indonesia Executive Director Andi Sukma stated that the key battle today is no longer about transaction volume, but rather about who can have the greatest impact on MSMEs and local brands. He believes platforms like Shopee, TikTok Shop, Tokopedia, and Lazada are not only competing to expand market share but also to create real growth opportunities for local businesses.
The research found that 77% of MSMEs and local brands were willing to recommend Shopee as a business partner, citing its ease of access, flexibility, and ability to expand market reach. This demonstrates that e-commerce’s role in Indonesia’s business ecosystem extends beyond just serving as a transaction channel and as a catalyst for growth and a driver of the digital economy.
MSMEs alone contribute more than 61% to Gross Domestic Product (GDP) and employ approximately 97% of the national workforce, making them the foundation of the Indonesian economy. By providing appropriate support to MSMEs, through fiscal policy, market protection, local product promotion, and access to a healthy digital ecosystem, the government is helping to maintain economic stability and reduce the risk of layoffs amidst global dynamics.
In this challenging situation, synergy between the central and regional governments, industry players, and digital platforms is key to maintaining the resilience of the national industrial sector. Through collaboration and measured policies, the government is affirming its commitment to protecting workers, strengthening local products, and maintaining the nation’s competitiveness amidst the onslaught of globalization.
)* Economic and MSME Observer
