By: Iksan Akbari )*
Facing global dynamics fraught with uncertainty, the Indonesian government has taken strategic steps through import deregulation as part of its efforts to maintain national economic stability. This policy is not only intended to strengthen the trade balance but also to ensure that national industries remain competitive amidst the rapid flow of globalization. When geopolitical and geoeconomic pressures become real challenges, a swift and appropriate response through regulatory adjustments is crucial. This deregulation measure was implemented in the form of regulatory simplification through Minister of Trade Regulation No. 16 of 2025 and eight other derivative Minister of Trade Regulations, which provide more specific provisions for certain imported commodities.
This deregulation measure reflects the government’s commitment to creating a more conducive business climate. Amidst criticism of previous import restriction policies, this deregulation has been a breath of fresh air for industry players who had previously struggled to obtain vital raw materials. For example, the textile and chemical industries, which had previously been hampered by Import Approval (PI) requirements, now find it easier to operate thanks to the elimination of this obligation for several categories of goods. This relaxation is expected to increase production efficiency and reduce logistics costs, which have been a major obstacle for the national industry.
This policy specifically provides relaxation for ten commodity groups classified into four main categories. First, raw materials and industrial supplies, such as plastics, fertilizers, and chemicals, which now only require a Surveyor Report (LS) as a restriction instrument. Second, products supporting national programs, including food trays to support the Free Nutritious Meal (MBG) program. Third, competitive industrial products, such as footwear and bicycles, which have high export potential. And fourth, forestry products, previously hampered by the requirement for a PI, now only require an import declaration from the Ministry of Forestry to ensure the legality and traceability of the wood.
However, it is important to note that this relaxation should not be misinterpreted as opening the door wide open for uncontrolled foreign products. The government continues to emphasize that protecting the domestic industry is a top priority. Minister of Trade Budi Santoso stated that this policy is temporary and will continue to be evaluated periodically. This demonstrates the government’s prudence in balancing the urgent need for raw materials with protecting the sustainability of local industries.
Although this policy has been positively received by many business players, economic observers still warn of potential risks. The massive influx of finished products from abroad could pose a serious threat if not balanced by strict oversight. Furthermore, many domestic industries are currently at a critical juncture due to pressure from cheap imports. The most obvious example is the decline in the textile and footwear sectors, which have experienced a wave of layoffs due to their inability to compete.
Piter Abdullah, an economist from the Prasasti Center for Policy Studies, stated that the success of this deregulation depends heavily on strengthening the oversight system. He emphasized the importance of law enforcement against smuggling and the entry of illegal goods. Without strong oversight, deregulation has the potential to backfire, weakening the competitiveness of local industries. Therefore, cross-sector collaboration is needed, from customs officials and technical ministries to local governments, to oversee the distribution channels of imported goods.
Furthermore, this deregulation policy must be supported by a long-term strategy to strengthen the national industrial structure. Dependence on imported raw materials must be gradually reduced through downstreaming and domestic industrialization. Investment in domestic research and development of alternative raw materials is also a crucial agenda that cannot be overlooked. In this way, Indonesia will not only become a market for foreign products but also a globally competitive producer.
Equally important is stakeholder involvement in policy formulation and evaluation. The voices of industry players, academics, associations, and civil society need to be heard to ensure that policies do not favor only one interest. The government needs to create an open and dynamic dialogue space so that policies can be adapted to realities on the ground. This is crucial to ensure that deregulation truly provides a solution, not just a short-term compromise.
Overall, import deregulation is part of a larger economic transformation, namely making Indonesia a nationAn advanced industry capable of competing globally. Therefore, this policy needs to be monitored and strengthened through other structural reforms, such as bureaucratic reform, workforce quality improvement, and strengthening logistics infrastructure. With a supportive ecosystem, national industry will not only survive but also thrive and become a key pillar of Indonesia’s future economic growth.
The government’s move to encourage import deregulation is commendable as a bold move in responding to global challenges. However, this boldness must be accompanied by strict policies and oversight to prevent backfires on national industry. The competitiveness of Indonesian industry is determined not only by free access to raw materials, but also by the country’s ability to create a fair, competitive, and sustainable system. If implemented properly, this policy could provide a strong foundation for a more inclusive industrial transformation that is resilient to external shocks.
)* The author is an Economic Observer
