The Indonesian government has issued a new law that requires large projects financed by the national or regional budget to use local products. The law also mandates that the government's budget allocation for procurement of goods and services should have a minimum local content level of 40 percent. The policy aims to support the domestic industry and reduce dependence on imports.
According to the Ministry of Public Works and Public Housing, based on e-monitoring data, the use of domestic products in infrastructure spending reached 93.4 percent in 2022, valued at IDR 112 trillion out of a planned IDR 120 trillion. However, the government cannot be solely responsible for the use of local products. The role of partners, such as planning consultants and suppliers of goods and services, is critical to ensure the optimal absorption of local content. The Indonesian National Association of Consultants has gathered construction vendors to prepare for the policy and ensure that the 40 percent minimum local content level can be achieved.
