Trade Winds of Change: Indonesia’s Shift to Import Substitution
Summary
- Constraints on imports have occurred with the implementation of the National Commodity Accounts System, regulated in Presidential Regulation No. 32/2022. This regulation stipulates that export and import permits for commodities and goods must use the national commodity balance sheet as the basis.
- Through Minister of Trade Regulation No. 36/2023, the policy to prevent imports has been proven to suppress imports.
- This policy of blocking imports is supported by an industry currently being choked with imported products.
- These import barriers cause supply chain disruptions for several industries, including automotive, mining, petrochemical, steel, electronics, and the food and beverage industry.
- The Ministry of Trade Regulation also regulates import restrictions for retailers. The regulation stipulates that retailers are required to show proof of the number of goods imported, the amount of stock they have, and the size of their business area before the government determines and issues the import quota.