Understanding TKDN: A Comprehensive Guide to Indonesia's Local Content Requirement
Tingkat Komponen Dalam Negeri (鈥淭KDN鈥�) or the Domestic Component Level, is a regulatory framework established by the Indonesian Government to promote the use of local components in the production of goods and services. This initiative is part of Indonesia鈥檚 commitment to strengthening national industries and reducing dependency on imports, making TKDN a crucial policy tool in the country鈥檚 economic and industrial development strategies. For businesses in key sectors such as manufacturing, oil and gas, telecommunications, and infrastructure, compliance with TKDN is not just a regulatory obligation but also a strategic advance that enhances competitiveness within Indonesian market.
The TKDN policy mandates that a certain percentage of domestic materials, labor, and services be utilized in production processes. This requirement applies to both public sector projects, including government procurement, and private sector initiatives that impact Indonesia鈥檚 national interests. The legal foundation for TKDN is rooted in several key regulations, such as Law of the Republic of Indonesia No. 3 of 2014 on Industrial Affairs, which establishes the foundational principles for industrial development and emphasizes the importance of domestic production, and Regulation of the President of the Republic of Indonesia No. 12 of 2021 on The Amendment to Regulation of the President No. 16 of 2018 on Government Procurement of Goods/Services that enhances transparency and support local suppliers in government procurement process. These regulations ensure that both foreign and domestic companies contribute to the country鈥檚 economic development by leveraging local resources.
Given the complexities surrounding TKDN compliance and the potential implications for businesses, EKONID aims to assist companies in navigating these regulations effectively. Therefore, EKONID would like to host the online roundtable focusing on (i) the implementation of TKDN requirements in various sectors and how businesses can align their practices accordingly, and (ii) clarifying the process for obtaining TKDN certification and understanding the benefits of compliance.