Pluses and Minuses of the New TKDN Rule to the Potential of Ecraf Investment

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The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

New Local Content Rules Need Follow-Up to Attract Investors

The government has just issued Minister of Industry Regulation 35/2025 on Provisions and Procedures for Certification of Domestic Content Level (TKDN) and Company Benefit Weight. This is a form of deregulation and refreshment of the old regulation, namely Permenperin 16/2011 concerning Provisions and Procedures for Calculating TKDN, which has not been replaced for fourteen years.
The new regulation makes changes to 13 important TKDN policy points which are divided into four main pillars. Namely, incentives, simplification, convenience, and speed.

Many Opportunities Little Attention, Indonesia-India Explore Promising Prospects

With both countries representing one-fifth of the world's population, India and Indonesia have many opportunities for cooperation with promising prospects. However, lack of attention and mutual understanding between the countries has kept many opportunities closed. Now, facing geopolitical turbulence, Indonesia and India can take advantage of the situation to explore partnership development by leveraging on a solid foundation.
The strategic potential in Indonesia and India's bilateral relations has so far gone unnoticed. Indonesian people's knowledge of India or vice versa is relatively minimal, and information exchange about the two countries is still limited to cooperation at the government level. In fact, there are far more similarities that can connect the two countries than differences that keep them apart.

Read the full story here.

Ecraf is getting more attractive, investment reaches Rp 90 trillion

The Ministry of Ecraf reported that investment realization from January to June 2025 reached Rp 90.12 trillion, up from around Rp 64 trillion in the same period last year. The government considers that this capital flow shows that the national ecraf ecosystem is increasingly trusted by investors. Singapore was the largest contributor to foreign investment with a value of nearly Rp 19 trillion. On the domestic side, Jakarta recorded a realization of around Rp26 trillion, up from Rp18 trillion in 2024. With this trend, Kemenparekraf is optimistic that the medium-term target of Rp 152 trillion-Rp 183 trillion by 2029 can be achieved.
Sub-sector export performance also showed positive results. Fashion was the main contributor with a value of more than US$7 billion, followed by crafts including furniture and handicrafts at US$5.01 billion, and culinary at nearly US$800 million. Destination markets were more diverse with shipments to Switzerland, Japan and the United Arab Emirates rising between 5% and 19%.

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Regional Transfer Funds Should Be for Public Services

Previously, in the 2026 Draft State Budget (RAPBN), the government allocated a transfer budget to the regions (TKD) worth IDR 650 trillion. This figure dropped significantly by IDR 214.1 trillion or 24.8% compared to the 2025 State Budget outlook which reached IDR 864.1 trillion.
The government's decision to cut the allocation of transfer funds to regions (TKD) in the draft budget for next year has reaped various reactions from various regional heads of government. They said that this has the potential to burden regional finances and hinder regional development.
However, the cut in TKD funds is an exercise in regional fiscal independence. Various regions are required to have a variety of innovations to increase local revenue so as not to depend on transfer funds from the central government. The government through the new Minister of Finance Purbaya Yudhi Sadewa emphasized that the government does not plan to cut transfers to the regions again. Instead, there are currently indications to increase the allocation of transfers to the regions.

More Resilient to Shocks, the Food and Beverage Industry Surges

Amidst the downturn in Indonesia's manufacturing industry in the past decade, the food and beverage industry is growing rapidly. This industry also absorbs more labor. The food and beverage (F&B) industry in Indonesia grew more convincingly than the manufacturing sector as a whole. In 2014, the F&B sector's contribution to gross domestic product (GDP) reached 5.32%. It will gradually increase to 6.92% by 2024.
This increase shows that domestic demand for food and beverage products remains strong, even amid economic uncertainty. The sector's GDP value-added continues to climb year-on-year. Over a decade (2014-2024), the F&B sector's value-added GDP more than doubled, from IDR 562 trillion to IDR 1,531.4 trillion.

Read more here.

Bank Indonesia (BI) Board of Governors Meeting (RDG): At this event, held September 16-17, 2025, the BI Board of Governors will announce the results of the meeting on Tuesday, September 16, 2025. During the meeting, members of the BI Board of Governors conduct a comprehensive evaluation of global and domestic economic, monetary, and financial system stability conditions. The outcome of the RDG is awaited by the market as it determines the direction of future monetary policy, including the setting of the benchmark interest rate (BI-Rate) which has a direct impact on borrowing costs, inflation, the rupiah exchange rate, and national economic growth. The result announcement will be broadcast via Bank Indonesia's Instagram and YouTube social media channels.

Sustainable Energy Transition in Indonesia (SETI) Seminar: This event themed "Raising Awareness of Energy Efficiency and Renewable Energy in Buildings" specifically aims to support Surabaya City in facing energy emission challenges. The event was held on Tuesday, September 16, 2025, from 08.00-17.00 WIB, at the ITS Postgraduate Auditorium, Surabaya. With a focus on building stakeholder capacity, the seminar will provide an in-depth understanding of energy efficiency and renewable energy in the building sector. Interested participants can join the event online through IESR and DG EBTKE's Zoom and YouTube platforms.