By: Dimas Aryaputra *)
The government’s move to revoke the Minister of Trade Regulation (Permendag) Number 8 of 2024 and replace it with nine new regulations based on industrial sector clusters is a progressive strategy that deserves appreciation. This policy is not just an administrative simplification, but rather a breakthrough in creating a business ecosystem that is more responsive to the needs of the national industry. In the context of encouraging inclusive and sustainable economic growth, this deregulation shows that the government is taking a proactive position to strengthen the foundation of the domestic industry.
One of the direct impacts of the deregulation is the acceleration of the production process. With simpler import permits for raw materials and capital goods, business actors can now reduce waiting times that were previously the main obstacle in the supply chain. This efficiency opens up more space for industry to increase production capacity while responding to market demand more quickly. This kind of advantage is greatly needed, especially by the labor-intensive industrial sector which has so far been hampered by complex licensing bureaucracy.
Member of Commission VI of the House of Representatives, Sartono Hutomo, expressed the view that this deregulation will play a major role in stimulating investment. According to him, a healthy investment climate can only be created if the licensing process is simplified without reducing the element of supervision. The clustering approach in the new regulation is also considered to allow the government to be more responsive in adjusting policies to the conditions of each sector. In this case, the textile, electronics, and chemical sectors are expected to feel the impact directly through increased production efficiency and price competitiveness.
However, support for deregulation does not mean opening the import tap freely. The government continues to emphasize the importance of technical supervision and control. The principle of prudence is key so that this policy does not backfire on the domestic industry. In this case, the government is encouraged to maintain the import approval (PI) mechanism, especially in strategic sectors such as textiles, to ensure that domestic workers and industries are not disrupted by the excessive entry of foreign goods.
Furthermore, strengthening the customs system is also an absolute requirement. Fraudulent practices such as under-invoicing or dumping must be prevented through strict and transparent classification at the port. This is not only important for the protection of local products, but also to maintain fairness in industrial competition. This step is vital considering that Indonesia is trying to push economic growth to reach 8 percent.
This deregulation policy also received support from the Indonesian Furniture and Craft Industry Association (HIMKI). This organization assessed that simplifying import permits could strengthen the competitiveness of the furniture industry, especially in terms of the availability of raw materials that cannot yet be met independently from within the country. However, HIMKI reminded of the importance of restrictions on imports of finished furniture products. If not strictly regulated, concerns about the flood of cheaper goods from abroad could be a real threat to downstream industry players in the country.
HIMKI Chairman Abdul Sobur emphasized that this policy must continue to provide proportional protection. He highlighted the need to balance between the relaxation of raw material imports and strict supervision of finished products. The Indonesian furniture industry, which has contributed to non-oil and gas exports and absorbed a large number of workers, needs fair policy support so that it can continue to grow without being disturbed by external pressures.
In line with this, Member of Commission VII of the House of Representatives, Kaisar Abu Hanifah, emphasized the importance of careful mapping of industrial needs. He considered that deregulation would only be effective if the policies taken were based on real data and input from industry players. The involvement of academics, industry associations, and business players in the formulation and implementation of policies is a requirement so that the results are right on target and sustainable. By involving various stakeholders, government policies will not only be more inclusive, but also have great potential to solve structural problems in the national supply chain.
The government’s efforts to issue nine new Permendag that have been grouped into industrial clusters is a technocratic step that prioritizes flexibility and adaptation. This classification provides the flexibility to improve regulations as industry dynamics develop. In addition, the issuance of two additional Permendag that regulate ease of doing business also shows that the government is not just deregulating, but also creating a new, more relevant legal basis.
In a broader perspective, this deregulation policy shows that the government is taking a strategic position in facing global challenges. When other countries increase protectionism, Indonesia has chosen the path of efficiency and competitiveness. This step needs to be supported by strengthening human resources, structural reforms in the industrial sector, and incentives that favor local business actors.
With proper supervision and active participation from various parties, this deregulation has the potential to be an important catalyst in driving the growth of the national industry. In addition to providing more space for business actors to develop, this policy is also in line with the government’s big agenda in creating jobs, increasing national productivity, and making Indonesia a highly competitive manufacturing center at the regional and global levels.
*) Researcher of National Industrial and Economic Policy
