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TKDN (Tingkat Komponen Dalam Negeri — Domestic Component Level) is Indonesia's headline local-content instrument. Government and SOE procurement is gated on minimum TKDN thresholds; numerous sector mandates (telecoms equipment, smartphones, medical devices, EVs, power-sector equipment) require domestic-content scores above specified floors before products can be sold to public buyers or qualify for procurement preferences. BMP (Bobot Manfaat Perusahaan — Company Benefit Weight) is a complementary score that rates the broader economic contribution of the supplier (employment, environment, R&D, MSME empowerment) and historically applied as a separate certification.
Permenperin 35/2025 reorganises the regime around four structural moves:
1. Single unified certificate. TKDN and BMP collapse into one certificate rather than two parallel processes — meaningful administrative simplification for bidders into Indonesian procurement. 2. Standardised 5-year validity. Previously most TKDN certificates were valid for 3 years, with sector-specific variations. The new regulation harmonises validity at 5 years across goods, industrial services, and mixed goods-services activities, lowering the recertification cost on long-cycle equipment (turbines, switchgear, medical-imaging, telecoms infrastructure). 3. 20-pp R&D / Industry-4.0 bonus. Producers conducting intensive R&D in-country or adopting designated Industry-4.0 technologies can add up to 20 percentage points of TKDN — a deliberate tilt of the regime away from "screwdriver assembly" local-content scoring toward IP-creating activity. 4. Compressed processing via independent verification institutes (LVI). General-industry certification through accredited LVIs targets ~10 working days (down from ~22), and SME (Industri Kecil dan Menengah / IKM) certification compresses to ~4 working days under a self- declaration plus light-touch SIINas-portal flow.
The regulation also expands scope to industrial services and mixed goods-service activities — engineering, installation, maintenance, EPC contracts — which were patchily covered or excluded under the 2011 baseline. This brings major categories of foreign- contractor work in Indonesia (oil & gas EPC, power-plant balance-of-plant, telecoms-rollout services) inside an explicit local-content scoring regime for the first time.
Permenperin 35/2025 revokes:
framework that has governed the regime for fourteen years.
BMP procedural rules.
Existing certificates issued under those regulations remain valid until their expiry — there is no forced re-certification.
procurement** face a recalibrated qualification path. Headline signal is positive (longer validity, faster issuance, single certificate); the 20-pp R&D bonus shifts competitive positioning toward firms willing to localise design / R&D rather than just CKD assembly.
Energy, GE Vernova, Hitachi, ABB, Mitsubishi Heavy local subs) enter the formal TKDN scoring perimeter. Where Indonesian state- owned utilities (PLN, Pertamina) act as procurement counterparty, TKDN gating now applies to service contracts as well as equipment.
TKDN remains a positive procurement preference for high-domestic-content bidders, and the new single-certificate regime lowers compliance friction for domestic SMEs (IKM) competing against import-heavy alternatives.
This is the procurement-side complement to the upstream-export-ban regime catalogued under em-resource-upstream-capture: where the export bans force value-add into Indonesia, TKDN steers state demand toward whatever has been domesticated. The two instruments reinforce each other.
the floors live in sector ministries' rules (Komdigi for telecoms, ESDM for energy, Kemendagri for procurement). Permenperin 35/2025 is a horizontal procedural overhaul, not a tightening of the thresholds themselves.
pool of accredited LVIs. How quickly Kemenperin builds out LVI capacity vs. concentrating accreditation among a few incumbent surveyors will determine whether the headline timeline is real.
R&D" and "Industry-4.0 adoption" is delegated to implementing guidance — likely to drive lobbying over which technologies and certifications qualify.
The July 2024 ESDM relaxation that exempted certain solar-PPA procurements from the 60% TKDN floor is in a different regulatory channel and is not modified here. Whether the new horizontal rules bleed into sector-specific carve-outs is a watch-item.
subject to informal pushback from major trading partners; the expansion to services and the explicit R&D-localisation bonus sharpen the discriminatory edge. No formal disputes filed at time of writing.