INDONESIA

ANALYSIS OF INDONESIA’S TRADE: DATA, PRODUCTS & PROCEDURES, FOR MORE DETAILED INFORMATION OR A SPECIFIC MARKET INTELLIGENCE MATTER OR ANY OTHER MATTER PLEASE CONTACT US

1. MACROECONOMIC TRADE CONTEXT

Annual Trade Volume 2024:

  • Total Trade: US$498.3 billion ↑ 3.66% from 2023 
  • Exports: US$264.7 billion (Rp4,335 trillion) ↑ 2.29% from 2023 
  • Imports: US$233.6 billion ↑ 5.3% from 2023 
  • Trade Balance: US$+31.1 billion surplus ↓ 15.78% from 2023 
  • Non-Oil & Gas Surplus: US$51.44 billion
  • Oil & Gas Deficit: US$20.4 billion 
  • Trade-to-GDP Ratio: 35.6% (2024 est.)
  • Global Rank: 27th largest exporter, 27th largest importer (2024) 
  • World Export Share: 1.1% (2024)
  • Currency: Indonesian Rupiah (IDR), US$1 ≈ IDR 16,380 (2024 average) 
  • Five consecutive years of trade surplus since 2020 

Geographic Distribution 2024 (Non-Oil & Gas) :

EXPORT MARKETS (US$248.8B non-oil & gas):

  1. Asia: Dominant share
    • China: US$60.2B (24.2% of non-oil & gas exports)
    • India: US$20.3B (8.2%)
    • Japan: US$18.5B (7.4%) (est.)
    • South Korea: US$9.8B (3.9%) (est.)
  2. Americas:
    • United States: US$26.3B (10.6%)
  3. ASEAN:
    • Singapore, Malaysia, Thailand, Vietnam – significant regional trade
  4. High-Growth Export Destinations (2024):
    • Eastern Europe: ↑ 113.9%
    • Australia: ↑ 60.6%
    • United States: ↑ 20.4% 

IMPORT ORIGINS (Non-Oil & Gas) :

  1. China: US$71.6B (36.3% of non-oil & gas imports)
  2. Singapore: US$9.7B (4.9%)
  3. Japan: US$14.9B (7.5%)
  4. United States: US$11.7B (5.9%) 
  5. Malaysia: US$11.0B (5.6%) 

TRADE SURPLUS BY PARTNER (2024) :

  • United States: +US$16.8 billion
  • India: +US$15.3 billion
  • Philippines: +US$8.8 billion

2. DETAILED EXPORT PRODUCT ANALYSIS

A. MINERAL FUELS & MINING PRODUCTS (Dominant Share)

1. Coal: US$43.2B (est.) (16.3% of total exports)

  • World’s largest thermal coal exporter
  • Production: 775 million metric tons (2024)
  • Major Buyers: China, India, Japan, South Korea
  • Kalimantan and Sumatra primary production regions
  • Export value declined 19.6% in 2024 due to price normalization 

2. Refined Petroleum Products: US$21.3B (8.0%) 

  • Export Destinations: Regional markets (ASEAN, East Asia)
  • Products: Gasoline, diesel, jet fuel, naphtha

3. Crude Petroleum: US$9.9B (3.7%) 

  • Production: 600,000 barrels per day
  • Export Destinations: Japan, South Korea, Australia

4. Petroleum Gas (LNG): US$3.7B (1.4%) 

  • World’s 9th largest LNG exporter
  • Bontang LNG Plant: East Kalimantan
  • Tangguh LNG: Papua (expanding capacity)
  • Major Buyers: Japan, South Korea, China, Taiwan

5. Copper Ores & Concentrates: US$7.2B (2.7%) (est.)

  • Freeport Indonesia (Grasberg): World’s largest gold mine and 2nd largest copper mine
  • Export growth: +51% in 2024 
  • Major Buyers: China, Japan, South Korea

6. Nickel Products: US$6.5B (2.5%) (est.)

  • World’s largest nickel producer (50% of global supply)
  • Export growth: +17% in 2024 
  • Shift from ore to processed products (NPI, ferronickel, MHP for batteries)
  • Major Buyers: China (80%+), South Korea, Japan

B. ANIMAL & VEGETABLE OILS (PALM OIL) (US$28.5B est., 10.8%)

1. Palm Oil and Fractions: US$24.8B (9.4%)

  • World’s largest producer and exporter (60% of global supply)
  • Production: 52 million metric tons (2024)
  • Export value declined 11.7% in 2024 
  • Volume decline: -17% 
  • Major Buyers: India (25%), China (15%), EU (12%), Pakistan, Bangladesh

2. Palm Oil Derivatives:

  • Oleo chemicals: Fatty acids, fatty alcohols, glycerin
  • Processed palm oil: Refined, bleached, deodorized (RBD)

C. ELECTRICAL MACHINERY & ELECTRONICS (US$16.8B est., 6.3%)

1. Electrical Machinery and Equipment: US$8.2B (3.1%)

  • Telephones/Smartphones: US$6.7B 
  • Electronic components: US$3.2B
  • Major Manufacturers: Samsung, Panasonic, Sharp, LG
  • Export Destinations: USA, Japan, Singapore, ASEAN

2. Machinery and Mechanical Appliances: US$8.6B (3.2%)

D. BASE METALS & PRODUCTS (US$22.4B est., 8.5%)

1. Iron and Steel: US$14.8B (5.6%)

  • Stainless steel: From nickel processing (Morowali, Weda Bay industrial parks)
  • Export growth in steel goods: +101% in 2024 
  • Major Buyers: China, USA, Europe, ASEAN

2. Aluminum and Articles Thereof: US$3.2B (1.2%)

  • Export growth: +70% in 2024 
  • Inalum: State-owned aluminum smelter

E. VEGETABLE PRODUCTS (US$13.2B est., 5.0%)

1. Rubber and Articles Thereof: US$5.8B (2.2%)

  • World’s 2nd largest natural rubber producer
  • Major Buyers: USA, China, Japan, India

2. Cocoa and Preparations: US$1.2B (0.5%)

  • Export growth: +118% in 2024 
  • Processing capacity expansion in Sulawesi

3. Coffee, Tea, Spices: US$1.8B (0.7%)

  • Coffee: 4th largest robusta producer
  • Specialty coffee: Growing premium segment

4. Animal Feed: US$2.4B (0.9%)

  • Palm kernel expellers
  • Fishmeal

F. OTHER EXPORTS

1. Footwear: US$5.2B (2.0%)

  • Major producers: Nike, Adidas, Puma suppliers
  • Concentration: Banten, West Java

2. Textiles and Apparel: US$4.8B (1.8%)

  • Facing competition from Vietnam, Bangladesh
  • Export destinations: USA, EU, Japan

3. Furniture: US$2.2B (0.8%)

  • Rattan furniture: World’s largest rattan producer
  • Wood furniture: Jepara carving center

4. Paper and Paperboard: US$3.5B (1.3%)

  • Pulp and paper: Asia Pulp & Paper, APRIL
  • Major Buyers: China, Japan, South Korea

5. Fishery Products: US$4.2B (1.6%)

  • Shrimp, tuna, crab, seaweed
  • Aquaculture growth: Shrimp farming expansion

6. Precious Metals/Jewelry: US$2.8B (1.1%)

3. DETAILED IMPORT PRODUCT ANALYSIS

A. MACHINERY & ELECTRICAL EQUIPMENT (US$60.6B, 25.9%) 

1. Machinery and Mechanical Appliances (HS84): US$33.5B (14.3%)

  • Industrial Machinery: US$12.4B
  • Construction Machinery: US$8.2B
  • Agricultural Machinery: US$4.1B
  • Power Generation Equipment: US$3.8B
  • Pumps and Compressors: US$2.5B
  • Primary Sources: China (45%), Japan (18%), South Korea (12%), Germany (8%)

2. Electrical Machinery and Equipment (HS85): US$27.0B (11.6%)

  • Telecommunications Equipment: US$8.2B
  • Semiconductors/Integrated Circuits: US$6.5B
  • Household Appliances: US$3.8B
  • Electronic Components: US$4.2B
  • Primary Sources: China (55%), Singapore (15%), Japan (12%), South Korea (8%)

B. MINERAL FUELS (HS27): US$40.7B, 17.4% 

1. Refined Petroleum: US$21.3B (9.1%) 

  • Diesel/Gasoil: US$8.2B
  • Gasoline: US$7.5B
  • Jet Fuel/Kerosene: US$2.1B
  • Fuel Oils: US$1.8B

2. Crude Petroleum: US$10.0B (4.3%) 

  • Primary Sources: Saudi Arabia, UAE, Nigeria, Angola

3. Petroleum Gas (LNG/LPG): US$3.7B (1.6%) 

  • LPG imports: Growing due to domestic conversion program

4. Coal and Coke: US$2.8B (1.2%)

C. BASE METALS (HS72-73, 76): US$17.1B, 7.3% 

1. Iron and Steel (HS72): US$10.7B (4.6%)

  • Flat-rolled products: US$4.2B
  • Bars and rods: US$2.8B
  • Stainless steel: US$1.5B
  • Primary Sources: China (60%), Japan (15%), South Korea (10%)

2. Articles of Iron/Steel (HS73): US$4.2B (1.8%)

  • Structures and parts: US$1.5B
  • Tubes and pipes: US$1.2B
  • Other fabricated products: US$1.5B

3. Aluminum and Articles (HS76): US$2.2B (0.9%)

  • Primary Sources: China, Australia, Malaysia

D. CHEMICALS & PLASTICS (HS28-40): US$32.3B, 13.8% 

1. Plastics and Articles (HS39): US$10.6B (4.5%)

  • Plastics in primary forms: US$5.2B
  • Plastic articles: US$3.8B
  • Primary Sources: China, South Korea, Japan, Singapore

2. Organic Chemicals (HS29): US$7.1B (3.0%)

  • Petrochemical feedstocks
  • Primary Sources: China, USA, South Korea

3. Fertilizers (HS31): US$2.0B (0.9%)

  • Government fertilizer subsidy program: 9.5 million tons allocated (2025) 
  • Subsidized fertilizers: Urea, NPK, organic, SP-36, ZA 
  • Primary Sources: China, Russia, Canada

4. Inorganic Chemicals (HS28): US$3.0B (1.3%)

5. Miscellaneous Chemicals (HS38): US$3.7B (1.6%)

6. Pharmaceutical Products: US$2.1B (0.9%)

E. VEHICLES & TRANSPORT EQUIPMENT (HS87): US$9.7B, 4.1% 

1. Passenger Vehicles (CKD and CBU): US$5.2B

  • CKD parts for local assembly: Toyota, Daihatsu, Mitsubishi, Honda
  • CBU imports: Premium brands (Mercedes, BMW, Lexus)

2. Commercial Vehicles: US$2.1B

3. Parts and Accessories: US$2.4B

F. FOOD & AGRICULTURAL PRODUCTS: US$18.5B, 7.9%

1. Cereals (HS10): US$6.8B (2.9%) 

  • Wheat: US$3.2B (no domestic production)
  • Rice: US$2.7B (world’s largest rice importer) 
  • Corn: US$0.9B (for animal feed)

2. Sugars and Confectionery (HS17): US$3.6B (1.5%)

  • Raw Sugar: US$2.8B (world’s largest raw sugar importer) 
  • Refined Sugar: US$0.8B

3. Oil Seeds and Oleaginous Fruits (HS12): US$1.9B (0.8%)

  • Soybeans: US$1.2B (for tempeh/tofu industry)
  • Primary Sources: USA (over 2 million metric tons in 2022) 

4. Residues and Animal Feed (HS23): US$3.8B (1.6%) 

  • Soybean meal, corn gluten feed
  • For livestock and aquaculture industries

5. Dairy Products: US$1.8B (0.8%)

  • 80% of domestic needs imported 
  • World’s 3rd largest skim milk powder importer 
  • Products: SMP, WMP, whey, lactose, cheese
  • Primary Sources: New Zealand, USA, Australia, EU

6. Beef and Bovine Products: US$1.2B (0.5%)

  • Imports: 307,825 metric tons (2023) – highest in years 
  • 2024 quotas reduced to 145,250 MT due to licensing delays 
  • Primary Sources: Australia (55%), India (buffalo meat 25%), USA (7%) 

7. Fresh Fruits: US$1.3B (0.6%)

  • Apples, pears, grapes, citrus (89% of imports) 
  • Primary Sources: China, USA, Australia, New Zealand

8. Processed Vegetables (incl. French fries): US$0.9B (0.4%)

  • French fries imports: ↑ 26% in 2023 
  • Sources: Belgium (31%), USA (21%), China (18%), Netherlands (16%)

9. Snack Foods: Growing premium segment 

G. TEXTILES & TEXTILE ARTICLES: US$5.8B, 2.5%

1. Man-Made Filaments (HS54): US$1.9B

2. Knitted Fabrics (HS60): US$1.8B

3. Cotton: US$1.2B

H. PRECIOUS METALS/GEMS (HS71): US$4.8B, 2.1% 

  • Gold: US$4.4B 
  • For jewelry manufacturing and investment

I. OPTICAL/MEDICAL EQUIPMENT (HS90): US$4.4B, 1.9% 

J. FURNITURE (HS94): US$1.8B, 0.8% 

K. PAPER & PAPERBOARD (HS48): US$1.7B, 0.7% 

4. TRADE PROCEDURES & REGULATIONS – DEEP DIVE

A. CUSTOMS DECLARATION PROCESS

1. Regulatory Framework:

  • Primary Authority: Directorate General of Customs and Excise (DGCE) under Ministry of Finance
  • Legal Basis: Customs Law No. 17/2006, various Minister of Trade Regulations
  • Latest Updates: Minister of Trade Regulation No. 37 of 2025 (MOT Reg. 37/2025) 
  • Trade Agreements:
    • ASEAN Free Trade Area (AFTA) – 99% of products duty-free intra-ASEAN
    • ASEAN-China FTA (ACFTA)
    • ASEAN-Korea FTA (AKFTA)
    • ASEAN-Japan CEP (AJCEP)
    • ASEAN-India FTA (AIFTA)
    • ASEAN-Australia-New Zealand FTA (AANZFTA)
    • Regional Comprehensive Economic Partnership (RCEP)
    • Indonesia-Japan EPA (IJEPA)
    • Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA)
  • Currency: Managed float, historically interventionist Central Bank

2. Importer Identification Number (API) System:

Two Types of API: 

  • API-U (General Importer Identification Number): For importing finished goods for resale/trade purposes
  • API-P (Producer Importer Identification Number): For importing raw materials, components, and semi-finished goods for use in manufacturing

Key Rules:

  • A company may hold only one API (either API-U or API-P) 
  • API-U may be converted to API-P, but conversion from API-P to API-U is not allowed 
  • API revocation is a one-time, irreversible process 
  • Goods imported under API-P may not be traded (even after revocation) 

API Registration Process (Electronic): 

  • Through Online Single Submission (OSS) system
  • Business Identification Number (NIB) functions as API
  • Validation through INATRADE (Ministry of Trade’s electronic trade licensing and monitoring platform)
  • Integrated with OSS platform

3. Import Prohibitions and Restrictions:

Absolutely Prohibited Imports:

  • Narcotics and psychotropic substances
  • Hazardous and toxic waste
  • Certain chemicals (ozone-depleting substances)
  • Pornographic materials
  • Weapons and explosives without license
  • Certain used goods (clothing, bags, electronics)

Restricted/Regulated Goods (Require Additional Permits):

  • Food and beverages: BPOM (National Agency of Drug and Food Control) registration
  • Pharmaceuticals and cosmetics: BPOM approval, GMP certification
  • Plants and animals: Ministry of Agriculture quarantine permits
  • Rice and sugar: Ministry of Trade special import approvals
  • Textiles, electronics, footwear: Technical regulations, SNI (Indonesian National Standard) certification
  • Alcoholic beverages: Special import licenses, high duties
  • Hazardous materials: Ministry of Environment permits
  • Telecommunications equipment: Ministry of Communication and Informatics type approval

4. Recent Regulatory Changes (2025-2026):

MOT Regulation No. 16 of 2025 (effective 30 August 2025) :

  • Revoked and replaced previous MOT Reg. 36/2023
  • Streamlined import licensing framework
  • Enhanced transparency in licensing processes
  • Introduced structured sanctions
  • Established new importing timelines

MOT Regulation No. 37 of 2025 (enacted 22 October 2025) :

  • API Conversion Procedures: Electronic through OSS system with documentary requirements
  • API Revocation: One-time, irreversible, electronic declaration through OSS
  • Post-revocation goods treatment: API-U goods may still be traded; API-P goods may NOT be traded
  • Verification and Technical Inspection:
    • No longer conducted in country of origin 
    • Now conducted at bonded logistics centers, free trade zones, and free ports within Indonesia 
    • Closer regulatory supervision
    • More effective compliance monitoring
  • Surveyor Reporting:
    • Single shipment validity 
    • Electronic submission through INATRADE
    • Automatically transmitted to Indonesia National Single Window (SINSW)
  • Expanded Data Requirements: HS Code, port of loading, bonded warehouse ID (TPB), KITE details (import facility for export purposes) 

5. Customs Declaration Timeline:

Standard Import Process:

  • Pre-shipment: Obtain necessary permits (BPOM, quarantine, etc.) – 2-8 weeks depending on product
  • Document Submission: Through INSW prior to cargo arrival 
  • Customs Clearance at Port: 3-7 days for green lane, 7-14 days for red lane
  • Tanjung Priok Port (Jakarta): 4-8 days average
  • Tanjung Perak Port (Surabaya): 3-7 days average
  • Belawan Port (Medan): 3-7 days average

Import Approval Validity:

  • Typically 6-12 months depending on product category
  • Single shipment validity for surveyor reports 

6. Required Documentation:

Mandatory Documents for Imports: 

  1. Proforma Invoice
  2. Commercial Invoice (in English, detailed)
  3. Bill of Lading / Airway Bill (original or electronic)
  4. Packing List
  5. Certificate of Origin (for preferential tariff claims)
  6. Insurance Certificate
  7. Import Declaration (PIB) – Electronic through INSW

Additional Documents (Where Applicable):

  • BPOM Registration Number (food, drugs, cosmetics)
  • Quarantine Release Certificate (plants, animals, fish)
  • SNI Certificate (products with mandatory standards)
  • Surveyor Report/Laporan Surveyor (LS) 
  • Technical Approval from relevant ministry
  • KITE Approval (for export-oriented manufacturing)
  • Recommendation Letter from relevant technical ministry

7. Customs Valuation:

  • WTO Valuation Method: Transaction value basis (CIF)
  • Additions: Commissions, assists, royalties, transport, insurance
  • Currency Conversion: Based on prevailing Bank Indonesia rates
  • Related Party Transactions: Must demonstrate arm’s length pricing

8. Electronic Systems:

Indonesia National Single Window (INSW): 

  • Single submission point for all trade documents
  • Integration with 35+ government agencies
  • Electronic Data Interchange (EDI) formats required
  • Standardized submission prior to cargo arrival

INATRADE: 

  • Ministry of Trade’s electronic licensing platform
  • Integrated with OSS for API management
  • For import approval applications

Online Single Submission (OSS): 

  • Business licensing platform
  • API registration and conversion
  • NIB issuance

B. TAXATION & DUTIES CALCULATION

1. Customs Duties Structure:

MFN Applied Tariffs:

  • Simple Average MFN: 7.6% (2024)
  • Trade-Weighted Average: 3.5%
  • Duty-Free Lines: 56% of tariff lines

Preferential Rates:

  • ASEAN-6 (AFTA): 0% on 99% of tariff lines for intra-ASEAN trade
  • FTA Partners: Varying preferences under bilateral and regional FTAs
  • RCEP: Progressive liberalization

Import Duty Rates by Category:

  • Raw Materials: 0-5%
  • Capital Goods: 0-5%
  • Intermediate Goods: 5-15%
  • Finished Goods: 15-30%
  • Luxury Goods: 30-50% (plus luxury tax)
  • Automotive: 25-80% depending on CBU/CKD status
  • Alcoholic Beverages: 40-150% (plus excise)
  • Rice, Sugar, Textiles: Protectionist rates (25-50%)

2. Value Added Tax (VAT – PPN):

  • Standard Rate: 11% (2024), scheduled to increase to 12% by 2025
  • Zero Rated: Exports, certain international services
  • Exempt: Essential goods (rice, corn, soybeans, etc.), educational services, health services
  • Registration Threshold: IDR 4.8 billion annual turnover
  • VAT on Import: Due upon customs clearance (import VAT)

3. Luxury Goods Sales Tax (PPnBM):

  • Applied to: Luxury vehicles, electronics, household appliances, certain foods/beverages
  • Rates: 10% to 200% depending on product category
  • High rates on: Large-engine vehicles (up to 125%)

4. Excise Duties:

  • Alcoholic Beverages: High rates (Rp 15,000 – Rp 139,000 per liter)
  • Tobacco Products: Complex tiered system based on production type and volume
  • Ethyl Alcohol
  • Sweetened Beverages: New excise (proposed)

5. Import Duty Exemptions & Incentives:

KITE (Kemudahan Impor Tujuan Ekspor – Import Facility for Export Purposes): 

  • For export-oriented manufacturers
  • Duty-free import of raw materials, components
  • Minimum export requirement: 50%
  • Simplified procedures

Bonded Zone/KITE Facility:

  • Manufacturing in bonded zones
  • Duty and VAT suspension
  • For production with significant export component

BKPM (Investment Coordinating Board) Incentives:

  • Tax holidays for pioneer industries (5-20 years)
  • Tax allowances for certain sectors
  • Import duty exemptions for machinery and equipment

C. SPECIAL CUSTOMS REGIMES

1. Bonded Logistics Centers:

  • In-country inspection points for verification and technical inspection (per MOT 37/2025) 
  • Storage without duty payment
  • For re-export or subsequent local release
  • Closer regulatory supervision 

2. Free Trade Zones & Free Ports: 

  • Batam, Bintan, Karimun (BBK) Free Trade Zones
  • Sabang Free Port
  • Benefits: Duty-free imports, simplified procedures, no VAT for certain transactions
  • Now serve as inspection points for verification of imported goods 

3. Bonded Warehouses (TPB – Tempat Penimbunan Berikat):

  • For storage of imported goods without duty payment
  • Time limits: Typically up to 3 years
  • For re-export, re-import, or subsequent local release after duty payment
  • Electronic reporting requirements through INSW

4. Temporary Importation:

  • For exhibitions, professional equipment, samples, re-export purposes
  • Requires guarantee (bank guarantee or insurance bond)
  • Maximum period: 6 months (extendable to 12 months)
  • Goods must be re-exported or duties become payable

5. ATA Carnet System:

  • For temporary admission of professional equipment, commercial samples, exhibition goods
  • Issuing Authority: Kadin (Indonesian Chamber of Commerce)
  • Benefits: No duties/bonds required
  • Participating Countries: Limited acceptance (check with Kadin)

D. SECTOR-SPECIFIC REGULATIONS

1. Food and Beverage Products:

BPOM Registration: 

  • Mandatory for all processed food, beverages, supplements
  • Registration types:
    • MD (Domestic): For locally produced foods
    • ML (Imported): For imported foods
  • Processing time: 4-12 weeks depending on risk category
  • Validity: 5 years (renewable)
  • Requirements: Product specifications, factory GMP certificate, ingredient list, lab test results, label samples

Labeling Requirements: 

  • Indonesian language mandatory for all food products
  • Required information:
    • Product name
    • Ingredients list
    • Net weight/volume
    • Nutritional information
    • Halal certification (for products claiming halal)
    • BPOM registration number
    • Manufacturer/importer name and address
    • Expiration date
    • Storage instructions
  • Non-compliance: Detention, refusal, or seizure at customs

Halal Certification:

  • Mandatory for all food, beverages, cosmetics, pharmaceuticals (by 2024-2026 phased implementation)
  • Issuing Authority: BPJPH (Halal Product Assurance Agency)
  • Certification bodies: MUI, LPPOM MUI, etc.

Import Quarantine: 

  • For plants, animals, fish, and their products
  • Issuing Authority: Indonesian Quarantine Agency (IQA) – merged from IAQA and IFQA in 2022 
  • Phytosanitary/Sanitary Certificates required from country of origin
  • Quarantine inspection upon arrival

2. Pharmaceutical Products:

BPOM Approval: 

  • Product registration required for all pharmaceuticals, traditional medicines, cosmetics
  • Validity: 5 years (renewable)
  • Requirements: GMP certification, product dossier, clinical trial data (for new drugs)

Import License:

  • Separate import approval from BPOM for each product/shipment
  • Good Distribution Practice (GDP) certification required for distributors

3. Cosmetics:

BPOM Notification: 

  • Notification system (simpler than pharmaceutical registration)
  • Online submission through BPOM’s notifkasi online system
  • Processing time: 3-14 days
  • Validity: 3 years (renewable)
  • Requirements: Product specifications, GMP certificate, safety assessment, label samples

4. Electronics and Electrical Equipment:

SNI (Indonesian National Standard) Certification:

  • Mandatory for 250+ product categories
  • Testing by accredited labs (in Indonesia or recognized foreign labs)
  • Certification bodies: LSPro (Product Certification Bodies)
  • Product marking: SNI logo required on product/label

Post-Clearance Audit: Risk-based selection, document verification and physical inspection for red-line cargo 

5. Automotive Sector:

CKD/SKD Import Approval:

  • For local assembly/manufacturing
  • Approval from Ministry of Industry
  • Local content requirements under car manufacturing program

CBU Import Restrictions:

  • High duties (30-80% + luxury tax)
  • Import licenses required
  • Technical approvals from Ministry of Transportation

6. Telecommunications Equipment:

Type Approval (Postel):

  • Issuing Authority: Ministry of Communication and Informatics
  • Testing by designated labs
  • Certification required for all telecom devices (phones, modems, routers, etc.)

7. Chemicals and Hazardous Materials:

Ministry of Environment Permits:

  • For import of hazardous and toxic substances (B3)
  • Technical recommendations required
  • Storage and handling permits

8. Textiles and Textile Products:

Technical Regulations:

  • SNI for certain products (children’s clothing, fabrics)
  • Import licensing (special approval from Ministry of Trade)
  • Quota restrictions for certain categories under safeguard measures

E. COMPLIANCE & ENFORCEMENT

1. Customs Inspection Channels:

Green Lane:

  • Minimum inspection, expedited clearance
  • For low-risk, compliant importers
  • Random audit post-clearance

Yellow Lane:

  • Document verification
  • For medium-risk shipments or first-time importers

Red Lane: 

  • Physical inspection required
  • For high-risk shipments, sensitive products, or importers with compliance issues
  • Includes verification of goods against documentation

2. Post-Clearance Audit:

  • Risk-based selection of importers/exporters
  • Audit focus: Valuation accuracy, classification correctness, origin claims, VAT compliance
  • Record keeping: Minimum 10 years
  • Audit outcomes: Additional assessments, penalties, or clearance

3. Offences and Penalties:

Customs Violations:

  • Under-declaration: Penalty up to 100% of duty underpaid + fines
  • Misclassification: Duty adjustment + administrative fines
  • False documentation: Criminal prosecution possible, fines up to IDR 5 billion
  • Smuggling: Imprisonment up to 10 years + fines up to IDR 5 billion

Import Licensing Violations:

  • Import without proper API: Goods confiscated, fines
  • API-U goods imported under API-P: Considered violation, penalties
  • Permit violations: Suspension or revocation of import facilities

4. Sanctions under MOT Reg. 16/2025: 

  • Structured and expanded sanctions framework
  • Progressive penalties for repeat violations
  • Suspension/revocation of import facilities

5. TRADE AGREEMENTS NETWORK

A. Multilateral Agreements:

  • WTO Member: Since 1995
  • ASEAN Free Trade Area (AFTA): Since 1992 – 99% of products duty-free intra-ASEAN
  • ASEAN+1 FTAs: China, Korea, Japan, India, Australia-New Zealand, Hong Kong
  • Regional Comprehensive Economic Partnership (RCEP): 2022
  • WTO Trade Facilitation Agreement: Ratified

B. Bilateral FTAs/EPAs:

  • Indonesia-Japan Economic Partnership Agreement (IJEPA): 2008
  • Indonesia-Pakistan FTA: 2013
  • Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA): 2021
  • Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA): 2020
  • Indonesia-EFTA FTA: 2021 (Switzerland, Norway, Iceland, Liechtenstein)
  • Indonesia-Mozambique PTA: 2022
  • Indonesia-Chile CEPA: Negotiating
  • Indonesia-EU CEPA: Negotiating
  • Indonesia-Turkey CEPA: Negotiating
  • Indonesia-Tunisia PTA: Negotiating

C. Rules of Origin:

General Rules:

  • Wholly obtained or produced (for natural resources)
  • Substantial transformation:
    • Change in Tariff Classification (CTC) at HS 4-6 digit level
    • Regional Value Content (RVC) 40% (ASEAN) or higher under other FTAs
    • Specific process rules for certain products

ASEAN (ATIGA) Rules:

  • RVC 40% or CTC
  • Cumulation: Across ASEAN member states
  • Self-certification: For approved exporters

Certificate of Origin Forms:

  • Form D: ASEAN (ATIGA)
  • Form E: ASEAN-China (ACFTA)
  • Form AK: ASEAN-Korea (AKFTA)
  • IJEPA: Specific format
  • IK-CEPA: Specific format
  • IA-CEPA: Specific format
  • RCEP: Specific format

6. MAJOR TRADE INFRASTRUCTURE

A. Ports (with Annual Throughput):

Java:

  • Tanjung Priok (Jakarta): Indonesia’s largest port, 7.6 million TEU (2024)
    • Handles 60% of Indonesia’s international trade
    • New Priok Container Terminal (Kalibaru) expansion
  • Tanjung Perak (Surabaya): 2.8 million TEU
    • Second largest port, serving Eastern Java
  • Ciwandan (Banten): New port, supporting Merak

Sumatra:

  • Belawan (Medan): 1.2 million TEU
  • Bakauheni (Lampung): Ferry port, Sumatra-Java connection
  • Palembang Port: River port, Sumatra’s southern region

Kalimantan:

  • Balikpapan Port: Oil and gas, coal
  • Samarinda Port: Coal barges
  • Kuala Tanjung (North Sumatra): Deep sea port development

Sulawesi:

  • Makassar Port: 500,000 TEU, Eastern Indonesia hub
  • Bitung Port: North Sulawesi, developing as international hub

Papua:

  • Amamapare: Freeport copper concentrate exports
  • Jayapura Port: Regional trade with PNG

Industrial Ports:

  • Morowali Industrial Park: Nickel processing, stainless steel exports
  • Weda Bay Industrial Park: Nickel processing
  • Bintan Industrial Estate: Aluminum smelting

B. Airports (Cargo Volume):

  • Soekarno-Hatta (Jakarta): 550,000 tons, main air cargo gateway
  • Juanda (Surabaya): 85,000 tons
  • Ngurah Rai (Denpasar): 45,000 tons (tourism-related)
  • Kualanamu (Medan): 40,000 tons
  • Hasanuddin (Makassar): 35,000 tons

C. Free Trade Zones:

  • Batam FTZ: Largest FTZ, electronics manufacturing
  • Bintan FTZ: Industrial and tourism
  • Karimun FTZ: Shipbuilding and repair
  • Sabang FTZ: Western gateway FTZ (developing)
  • Benefits: Duty-free imports, VAT exemption, simplified procedures, now serve as inspection points 

D. Industrial Parks and Special Economic Zones (SEZ):

  • Morowali Industrial Park: Nickel processing SEZ
  • Weda Bay Industrial Park: Nickel SEZ
  • Sei Mangkei SEZ: Palm oil downstream
  • Bitung SEZ: Fisheries processing
  • Palu SEZ: Processing industries
  • Galang Batang SEZ: Bauxite processing
  • KEK Mandalika: Tourism SEZ
  • KEK Tanjung Lesung: Tourism SEZ

E. Logistics Hubs:

  • Cakung Logistic Center (Jakarta)
  • Surabaya Industrial Estate Rungkut (SIER)
  • MM2100 Industrial Town (Cikarang)
  • Delta Silicon Industrial Park (Cikarang)
  • Bekasi International Industrial Estate

F. Border Crossing Points:

Major Land Border Crossings:

  • Malaysia (Kalimantan): Entikong, Tebedu, Aruk
  • Papua New Guinea: Skouw, Wutung
  • Timor-Leste: Mota’ain, Wini

7. EMERGING TRENDS & FUTURE DEVELOPMENTS

A. Downstreaming (Hilirisasi) Policy:

  • Nickel ore export ban fully implemented (2020)
  • Bauxite export ban (June 2023)
  • Copper concentrate export ban (May 2024) with phased implementation
  • Tin export restrictions planned
  • Objective: Capture more value through domestic processing
  • Result: Rapid growth in stainless steel, nickel matte, MHP exports
  • Impact: Investment surge in smelters (Morowali, Weda Bay)

B. Electric Vehicle (EV) Ecosystem Development:

  • Nickel-based battery manufacturing: Partnerships with LG, CATL, Foxconn
  • EV manufacturing incentives: Tax holidays, import duty exemptions
  • Domestic market development: EV subsidies (7 million IDR per unit)
  • Target: EV production 600,000 units by 2030
  • Export potential: EV batteries, EV components, eventually complete EVs

C. Agricultural Transformation: 

  • Food Estate Program: Large-scale food production in Central Kalimantan, Sumatra
  • Fertilizer Subsidy Program: 9.5 million tons allocated (2025) with IDR 46.8 trillion budget 
  • Three-tier distribution system integrated with i-Pubers app 
  • Subsidy coverage expansion: Organic fertilizers, urea, NPK, SP-36, ZA under Presidential Regulation No. 6/2025 
  • Fertilizer imports authorized to address domestic shortfalls 

D. Digital Agriculture (E-Agriculture): 

  • Agricultural War Room (AWR): Established 2021, integrates real-time data from Digital Collection Platform (DCP)
  • National E-Agriculture Strategy Roadmap: Integrated farmland and farmer database by 2027
  • Early warning systems for agricultural threats
  • AgTech startups: Aruna, FishLog, Sayurbox, Super, Semaai, iGrow, Eden Farm, Jala, PasarMIKRO, Chilibeli 

E. Electrifying Agriculture (EA) Program: 

  • Launched 2021 by PT PLN
  • Electric-powered technologies in farming, fisheries, plantations, livestock
  • 300,000+ customers served by end-2024 (up from 241,700 in 2023)
  • Transition from fossil fuels to electricity for irrigation pumps, rice milling machines

F. Digital Economy Growth:

  • E-commerce: 25% annual growth (Shopee, Tokopedia, Lazada, Bukalapak)
  • Fintech: Digital payments, lending, insurtech (GoPay, OVO, Dana, LinkAja)
  • Cross-border e-commerce: Growing SME exports through platforms
  • Digital infrastructure: Palapa Ring fiber optic network

G. New Capital City (IKN) Development:

  • Nusantara in East Kalimantan
  • Construction-phase imports: Heavy machinery, construction materials, building equipment
  • Operational-phase opportunities: ICT, smart city solutions, infrastructure
  • Long-term economic shift toward Kalimantan

H. Green Economy Initiatives:

  • Carbon trading: First carbon trading launched 2023
  • Renewable energy targets: 23% by 2025, 31% by 2050
  • Biofuel program: B35 (35% biodiesel blend)
  • Sustainability certification: ISPO (Indonesian Sustainable Palm Oil) mandatory

I. Import Regime Modernization: 

  • MOT Reg. 16/2025 and 37/2025: Streamlined licensing, enhanced transparency
  • Electronic integration: OSS, INATRADE, INSW fully integrated 
  • Verification shift: From country of origin to in-country inspection points 
  • Single shipment validity for surveyor reports 
  • Enhanced data requirements: HS Code, port of loading, TPB, KITE details 

J. RCEP and CPTPP Considerations:

  • RCEP implementation: Expanding trade with Asia-Pacific
  • CPTPP accession: Under consideration, potential new market access

K. Geopolitical Factors:

  • US-China trade tensions: Indonesia as alternative manufacturing base
  • BRICS membership (potential): Trade policy implications
  • Trade defense measures: Safeguards on textiles, ceramics, footwear

8. KEY CONTACTS & RESOURCES

A. Government Agencies:

  1. Directorate General of Customs and Excise (DGCE): beacukai.go.id
    • Phone: +62 21 489 5308
    • Email: humas@customs.go.id
    • Address: Jl. Jenderal Ahmad Yani, Jakarta 13230
  2. Ministry of Trade (Kemendag): kemendag.go.id
    • Phone: +62 21 385 8171
    • Email: info@kemendag.go.id
    • Address: Jl. M.I. Ridwan Rais No.5, Jakarta 10110
  3. Indonesia National Single Window (INSW): insw.go.id
  4. Investment Coordinating Board (BKPM): bkpm.go.id
  5. National Agency of Drug and Food Control (BPOM): pom.go.id
  6. Indonesian Quarantine Agency (IQA): karantina.pertanian.go.id
  7. Statistics Indonesia (BPS): bps.go.id
  8. Bank Indonesia: bi.go.id
  9. Ministry of Industry: kemenperin.go.id
  10. Ministry of Energy and Mineral Resources: esdm.go.id

B. Business Organizations:

  1. Indonesian Chamber of Commerce and Industry (KADIN): kadin.id
  2. Indonesian Employers Association (APINDO): apindo.or.id
  3. Indonesian Food and Beverage Association (GAPMMI): gapmmi.id
  4. Indonesian Palm Oil Association (GAPKI): gapki.id
  5. Indonesian Textile Association (API): api.or.id
  6. Indonesian Footwear Association (APRISINDO)
  7. Indonesian Cosmetics Association (PERKOSMI)

C. Digital Portals:

  1. Indonesia National Single Window (INSW): insw.go.id
  2. INATRADE: inatrade.kemendag.go.id
  3. Online Single Submission (OSS): oss.go.id
  4. CEISA (Customs Electronic System): ceisa.beacukai.go.id
  5. BPOM Notifkasi Online: notifkasi.pom.go.id

D. Practical Guidance for Traders:

For Exporters to Indonesia:

  1. Work with Experienced Customs Brokers: Essential for navigating complex regulations 
  2. Obtain Necessary Permits BEFORE Shipping: BPOM, quarantine, SNI, etc. – processing takes weeks 
  3. Use Licensed Indonesian Importers: Must hold valid API (API-U or API-P) 
  4. Verify API Type: API-P cannot import finished goods for resale 
  5. Prepare Complete Documentation: Minor errors cause major delays 
  6. Indonesian Language Labels: Mandatory for all food products 
  7. Halal Certification: Increasingly mandatory for food, beverages, cosmetics
  8. Electronic Submission: Through INSW prior to cargo arrival 
  9. Check Regulatory Updates: Frequent changes (MOT 16/2025, 37/2025) 

For Importers from Indonesia:

  1. Verify Export Licenses: For restricted products (timber, minerals, etc.)
  2. Certificate of Origin: Claim FTA preferences (Form D, E, AK, etc.)
  3. Quality Certification: Ensure compliance with destination country standards
  4. Sustainability Certification: Required for palm oil, timber, fisheries (ISPO, SVLK, MSC)
  5. Logistics Planning: Consider port congestion at Tanjung Priok
  6. Payment Terms: LC common for new relationships

9. ECONOMIC IMPACT & STRATEGIC POSITION

A. Trade Balance Dynamics:

  • Five consecutive years of surplus since 2020 
  • 2024 surplus: US$31.1 billion ↓ 15.78% from 2023 
  • Non-oil & gas surplus: US$51.44 billion 
  • Oil & gas deficit: US$20.4 billion 
  • Surplus trend continues despite commodity price normalization 

B. Global Strategic Position:

  1. Nickel Superpower: World’s largest nickel producer (50% of global supply)
  2. Palm Oil Dominance: World’s largest producer and exporter (60% of global supply)
  3. Thermal Coal Leader: World’s largest thermal coal exporter
  4. Tin Power: World’s 2nd largest tin producer
  5. Copper Producer: Home to world’s 2nd largest copper mine (Grasberg)
  6. LNG Exporter: World’s 9th largest LNG exporter
  7. ASEAN Hub: Largest economy in Southeast Asia
  8. Demographic Dividend: 280 million population, 4th largest globally

C. Competitiveness Indicators: 

  • Economic Complexity Index (Trade): -0.06 (64th out of 130, 2024)
  • Economic Complexity Index (Technology): -0.51 (63rd out of 96, 2021)
  • Economic Complexity Index (Research): 0.29 (42nd out of 137, 2023)
  • Ease of Doing Business: 73rd worldwide (2019)
  • Logistics Performance Index: 46th worldwide (2016)
  • Trading Across Borders: 62nd worldwide (2019)

D. Challenges:

  1. Export Concentration: Heavy dependence on commodities (coal, palm oil)
  2. Downstreaming Implementation: Phasing out raw material exports while building processing capacity
  3. Infrastructure Gaps: Port congestion, logistics costs (highest in ASEAN)
  4. Regulatory Complexity: Frequent policy changes, overlapping authorities 
  5. Import Licensing Hurdles: Complex system causing delays 
  6. Rupiah Volatility: Currency fluctuations affecting trade competitiveness
  7. Trade Defense Actions: Safeguard measures affecting imports
  8. Climate Vulnerability: Palm oil and agriculture sectors face sustainability pressure

E. Opportunities:

  1. EV Battery Supply Chain: Nickel processing, battery manufacturing, EV assembly
  2. Downstreaming: Processing minerals (bauxite, copper, tin) domestically
  3. Digital Economy: Growing e-commerce, fintech, tech startup ecosystem
  4. Renewable Energy: Geothermal, solar, biofuel development
  5. Infrastructure Investment: New capital city (IKN), ports, toll roads
  6. Food Security: Agricultural modernization, fertilizer distribution improvements 
  7. RCEP Integration: Expanded market access in Asia-Pacific
  8. Supply Chain Diversification: Companies relocating from China
  9. Blue Economy: Fisheries, marine resources, maritime logistics
  10. Healthcare Manufacturing: Pharmaceutical and medical device production

SUMMARY OF INDONESIA’S TRADE CHARACTERISTICS:

  1. Commodity Powerhouse: World leader in nickel, palm oil, thermal coal; major producer of tin, copper, LNG
  2. Downstreaming Focus (Hilirisasi): Moving from raw material exports to processed products (nickel to stainless steel/batteries)
  3. ASEAN’s Largest Economy: Gateway to Southeast Asia’s 680 million consumers
  4. Demographic Giant: 280 million population, growing middle class
  5. Trade Surplus Champion: Five consecutive years of surplus since 2020 
  6. FTA Network: Extensive regional and bilateral agreements including RCEP
  7. Complex Regulatory Environment: Frequent changes, multiple permits required 
  8. API System: Strict separation between general importers (API-U) and producer importers (API-P) 
  9. In-Country Verification Shift: 2025 reforms moving inspection from country of origin to domestic bonded zones 
  10. Food Import Dependence: World’s largest rice and raw sugar importer; 80% of dairy imported 

Indonesia represents Southeast Asia’s largest economy, combining world-leading commodity production (nickel, palm oil, coal) with a massive domestic market and growing manufacturing capabilities. The country’s strategic “downstreaming” (hilirisasi) policy aims to capture more value from natural resources through domestic processing, with nickel leading the way into EV battery production. Indonesia’s extensive FTA network (including RCEP), demographic dividend, and infrastructure investments position it for continued growth. However, traders must navigate a complex regulatory environment, frequent policy changes, and significant import licensing requirements . Recent 2025 reforms (MOT Reg. 16 and 37) aim to streamline procedures and enhance transparency , but working with experienced local partners remains essential for success. Indonesia’s trade future depends on successful downstreaming implementation, infrastructure development, regulatory simplification, and leveraging its natural resource wealth into higher-value manufacturing.