Indonesia’s import rules are set for major changes as the government prepares to tighten regulations to protect local Micro, Small, and Medium Enterprises (MSMEs). Minister for MSMEs Maman Abdurrahman confirmed that the Ministry of Finance, the Ministry of Trade, and the Ministry of Industry are actively discussing new controls. He emphasized the urgency of clear and firm rules to prevent local industries from losing ground to foreign products flooding the domestic market.
Indonesia Import Reforms Target Locally Produced Goods
The government aims to limit imports of goods that local MSMEs can already produce in large volumes. Maman explained that the current system allows foreign products to compete directly with domestic items, which weakens local manufacturers. He stressed the need for firm action, saying, “We want to arrange it so that if certain goods can already be produced by our MSMEs, then we will limit those imported goods. But if we still cannot produce those items, then it’s fine to import them.”
He highlighted several examples of products that MSMEs produce consistently, including clothing, hijabs, batik shirts, pants, shoes, and sandals. These goods continue to face competition from imported items despite strong local manufacturing capacity. Therefore, the government wants to ensure that local industries receive fair protection as they grow their production capabilities.
Government Strengthens Indonesia Import Controls to Protect MSMEs
The proposed reforms do not reflect an anti-import stance. Instead, the government aims to create a balanced system that supports domestic production while keeping essential imports open. Maman emphasized this point, noting that “The government is not anti-import; restrictions are only needed for categories of goods with strong domestic production capacity.”
He added that imports remain necessary for products that local industries cannot yet produce. However, he urged policymakers to act selectively when setting guidelines for well-established industries. The government wants to prevent situations where imported goods force small and medium manufacturers to reduce operations or lay off workers.
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Grey-Area Import Regulations and Enforcement Challenges
Maman also addressed the long-standing challenges related to grey-area import regulations. These rules often create loopholes that certain businesses exploit, making oversight difficult. He noted that goods with unclear legal status frequently enter the market and complicate enforcement efforts.
He pointed out that a special task force for illegal imports is not yet necessary. Instead, the government intends to act firmly against improper import practices involving cargo and logistics companies. He underscored the need for legal clarity, stating, “We need to regulate their legality first. We can’t let this continue, because our commitment and protection for local MSMEs are far more important.”
These regulatory gaps have allowed some operators to misuse unclear import channels. The government now plans to tighten oversight to prevent illegal activity and reinforce fair competition across industries.
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Impact on Local Industry and National Employment
Maman emphasized the importance of MSMEs to Indonesia’s economy. He reminded the audience that MSMEs contribute around 60% to the national GDP and absorb 90–95% of the workforce. Because of this significant role, the government considers it crucial to shield them from excessive import pressure.
He explained that without stronger safeguards, MSMEs risk losing market share and may struggle to survive. Maman provided an example where unrestricted imports pressured small and medium manufacturers, saying, “For example, we can already make clothes and develop the textile industry, but the impact is that our small and medium industries end up laying off workers because they are hit by those imported products.”
The government aims to use the revised import regulations to stabilize these industries and reduce market disruption caused by cheap foreign goods.
Protecting MSMEs Through Responsible Import Policies
The government’s plan to tighten import rules reflects its commitment to strengthening local industries and supporting national economic resilience. Through responsible import policies, Indonesia seeks to balance domestic production capacity with essential global trade needs while giving MSMEs the protection they need to grow sustainably.
Source: ekonomi.bisnis.com
Image: Tom Fisk / Pexels
