The Advantages of TKDN Products for the Domestic Business Industry

Indonesia is one of the richest countries in the world when it comes to natural resources. However, our level of imports is still relatively high. It cannot be denied that several domestic industries still need to import goods, especially raw materials that cannot be produced locally.

To prevent the surge of imported products into Indonesia, during the presidency of Mr. Joko Widodo, business owners were encouraged to obtain a TKDN certification. TKDN stands for Tingkat Komponen Dalam Negeri or Domestic Component Level, which refers to the percentage of a product or service’s production components that are made in Indonesia.

A Brief Overview of TKDN Regulations in Indonesia

Every industry has its own product components. For example, the oil and gas industry involves elements such as raw materials, labor, machinery, electricity, and others. Some of these components often need to be imported. The TKDN regulation established by the government limits the proportion of imported components to a certain percentage.

This regulation has existed since 2018, specifically under Presidential Decree No. 24 of 2018 on the National Team for the Enhancement of Domestic Product Usage, and Government Regulation (PP) No. 29 of 2018 on Industrial Empowerment. Through these regulations, the government mandates the use of TKDN products for state-owned enterprises (BUMN), regional-owned enterprises (BUMD), and government institutions that use grant funds. However, the rules are still relatively lenient for private companies.

According to the National Medium-Term Development Plan (RPJMN) 2020–2024, the Ministry of Industry targets the average TKDN value to increase to 50% by 2024, up from 43.3% in 2020.

Advantages of Having TKDN-Certified Products

While the government mandates TKDN for certain industries and public institutions, having TKDN-certified products also provides several advantages that other products do not have.

1. Supporting Domestic Industries

By obtaining TKDN certification, local businesses directly contribute to the country’s economic growth. Instead of spending money on imported goods, funds are circulated within domestic industries, helping strengthen Indonesia’s economy.

As the economy grows, more job opportunities are created for local workers. Additionally, the production of local goods increases income tax (PPh) contributions to the state.

2. Building a Strong Supply Chain Ecosystem

TKDN-certified products also help establish a strong supply chain ecosystem. When many companies need specific raw material components, component vendors are encouraged to build factories in Indonesia and sell their parts to local assembly manufacturers.

If this ecosystem develops well, Indonesia has the potential to become a production and export hub for the Southeast Asian and Afro-Asian markets.

3. Creating Equality Between Local and Foreign Players

Beyond strengthening the national economy, optimizing TKDN in Indonesian industries also promotes equality between domestic and foreign players. It encourages knowledge and technology exchange between local and international industries.

4. Eligibility for Display in the LKPP e-Catalog

Another major advantage is that TKDN-certified products can be displayed in the LKPP e-Catalog—an online procurement platform developed by the National Public Procurement Agency (LKPP). This catalog provides detailed information on products required by government institutions, including product type, technical specifications, TKDN percentage, Indonesian National Standard (SNI) compliance, and local origin.

To qualify for government procurement, a product or service must have a minimum TKDN value of 25%. For business owners, this provides a significant competitive edge.

Conclusion

PT Alba Unggul Metal is among the official TKDN-certified product providers listed in the LKPP e-Catalog. This certification proves that all office equipment manufactured by PT Alba Unggul Metal meets government requirements and standards, including TKDN value compliance.

In other words, PT Alba Unggul Metal not only delivers high-quality products but also contributes to Indonesia’s economic progress.
Let’s support local industries by choosing TKDN-certified Indonesian products!