Domestic Entrepreneurs Support Tightening Imports of Electronic Goods

The government limits imports for 78 electronic goods. This policy is aimed at spurring national manufacturing.

KOMPAS/BENEDIKTUS KRISNA YOGATAMA

The assembly of electronic goods in Indonesia is carried out at PT Adi Pratama Indonesia, which has a factory on Jalan Raya Curug, Tangerang Regency, on Friday (1/12/2023). This factory produces televisions, laptops, CCTV, and various other electronic goods under the SPC brand.

JAKARTA, KOMPAS — A number of domestic business actors support the government's policy of tightening imports of electronic goods. Raw materials and auxiliary materials, which have so far been imported, are the next homework so that more can be produced domestically.

The government is tightening the import of electronic products. This policy is reflected in the Regulation of the Minister of Industry Number 6 of 2024 concerning Procedures for Issuing Technical Considerations for Importing Electronic Products. The regulation is intended to boost domestic industrial production.

In this regulation, the import of 78 electronic goods is restricted. These include water pumps, refrigerators, washing machines, water heaters, speakers and supports, as well as monitors and projectors.

In this regulation, the import of 78 electronic goods is restricted.

The Secretary General of the Association of Electronic Businesspeople (Gabel), Daniel Suhardiman, welcomed the presence of this regulation on Wednesday (April 17, 2024). He hopes that regulations on the entry of imported electronic goods can drive market absorption by domestic electronic producers.

The domestic electronics industry has not yet become the master in its own country. Referring to the National Industrial Information System, for example, the domestic AC production capacity reached 2.7 million units in 2023. However, the realization was only 1.2 million units, or only 43 percent. AC product imports in 2023 reached 3.8 million units.

The issue of industrial competitiveness, according to Daniel, cannot be solved solely through import trade regulations. There are still other problems, such as the weakness of the upstream electronics industry that produces raw materials and core components for the downstream industry.

As a result, the electronic industry still has to import raw materials for production. This has not provided production scale efficiency for downstream electronics industry. Therefore, with the regulations limiting the import of electronic goods, it is hoped that the upstream industry will grow rapidly which will trigger integrated downstream development.

"Of course, the government's challenges in implementing this regulation are very high, and it needs support and input from all stakeholders so that it can be implemented smoothly," said Daniel.

KOMPAS/P RADITYA MAHENDRA YASA

Visitors from other schools observing a laptop screen at an exhibition booth in SMK Negeri 10, Semarang City, Central Java, on Friday, January 19th, 2024. Various forms of technology that are currently developed have become part of the education, training, and competency processes for vocational high school students. They must adapt quickly by utilizing these technologies as part of the learning and teaching process.

The Chairman of the Indonesian Cable Factory Association, Noval Jamalullail, stated that the implementation of Regulation of the Minister of Industry No. 6 of 2024 is the best solution as a form of support for the domestic cable industry, especially for optic fiber cable manufacturers.

"Because this will revive the production of domestic fiber optic cable industries to actively meet the national needs in developing telecommunication infrastructure and internet networks throughout Indonesia," he said.

The regulation, as Noval continued, also provides new hope for the development of domestic fiber optic cable industry. Moreover, currently the ability and capacity of fiber optic cable industry in Indonesia is already sufficient.

Also read: Waiting for the Electronics Industry to Become King in its Own Country

Domestic fiber optic cable industry, he continued, is now capable of producing all types of fiber optic cables, from small to large sizes. The variety of cable types has also expanded, ranging from indoor, aerial, underground, to submarine cables.

The great capacity and capability are in line with the presence of several global investors from China, Korea, and Japan who have built several optic fiber cable factory facilities in Indonesia in the last eight years. However, the capacity is only utilized with production occupancy below 50 percent of the installed capacity. The total domestic cable production capacity reaches 15 million kilometers of fiber.

All fiber optic cable processes including colouring, tubing, stranding, armoring, sheating or jacketing is 100 percent done domestically.

KOMPAS/BENEDIKTUS KRISNA YOGATAMA

The assembly of electronic goods in Indonesia is carried out at PT Adi Pratama Indonesia, which has a factory on Jalan Raya Curug, Tangerang Regency, on Friday (1/12/2023). This factory produces televisions, laptops, CCTV, and various other electronic goods under the SPC brand.

Minister of Industry Agus Gumiwang, Tuesday (16/4/2024), explained that the release of regulations on imports of electronic goods was aimed at stimulating the growth of the domestic electronics industry. The hope is that this can encourage investment in upstream electronics so that it can create downstream electronic products.

"The Ministry of Industry understands the capacity, strength, and magnitude of supply and demand. This regulation is aimed at driving the growth of the electronics industry," said Agus.

Also read: Prevent a "Tsunami" of Electronic Waste, Don't Change Cell Phones Often

Director of Electronics and Telematics Industry (IET) of the Directorate General of Metal, Machinery, Transportation Equipment, and Electronics Industry (ILMATE) at the Ministry of Industry, Priyadi Arie Nugroho, explained that this regulation is a concrete effort from the government to create investment certainty for industry players in Indonesia. Specifically, this regulation addresses domestic electronic products.

Priyadi stated that his team understands that the import trade for electronic products is a new and unprecedented matter. "It is important to note and emphasize together that the issuance of this electronic product import trade policy does not mean that the government is anti-import, but rather to maintain a conducive business climate for the domestic industry, especially for products that have been produced domestically," he said.