The Ministry of Industry has reformed the domestic component level (TKDN) policy by introducing a system that is more transparent, accountable, easy and fast, thereby strengthening the competitiveness of national industry and encouraging the use of domestic products. The reform is set out in Regulation of the Minister of Industry Number 35 of 2025 on the Provisions and Procedures for TKDN Certification and Company Benefit Weight (BMP).
Besides certification through an Independent Verification Body (LVI), the government also offers small industries a facility to obtain a TKDN Certificate through a self declare scheme, which can be accessed free of charge and easily via the National Industrial Information System (SIINas).
“The simplified calculation and special treatment for small industries through the self declare mechanism is meant to raise the capabilities of small industries so that they are more confident playing in bigger markets. However, this policy reform still involves oversight, with checks on the conformity and accuracy of industry data before TKDN applications for industrial products,” Minister of Industry Agus Gumiwang Kartasasmita said in a statement in Jakarta on Monday (2/3).
The Minister of Industry said checking the conformity and accuracy of industry data is important to prevent misuse of self declare TKDN applications. “The self declare TKDN certification is a convenience for small industries, with a shorter certification time and no cost, to obtain a TKDN certificate valid for five years,” the Minister said.
Kemenperin therefore applies a validation mechanism for small industry businesses in SIINas for every small industry business that wishes to apply for self declare TKDN. This is set out in the implementing regulation, Regulation of the Director General of IKMA Number 261 of 2025 on Technical Guidelines for Validating Small Industry Businesses for the Calculation of the Domestic Component Level of Goods by Self Declare.
“The validation process must be carried out before applying for certification, so that only businesses validated as small industries can apply for self declare TKDN certification. That way, small industries that already hold a Self Declare TKDN certificate can participate more widely in government procurement of goods/services,” the Minister of Industry explained.
Under IKMA Director General Regulation Number 261 of 2025, companies that can apply for self declare TKDN are small industrial companies registered in SIINas, with maximum business capital of IDR 5 billion (excluding land and buildings), with an industrial-sector KBLI business classification in accordance with laws and regulations, and that have submitted industry data via SIINas.
The Director General of Small, Medium and Miscellaneous Industries (IKMA), Reni Yanita, said that under the regulation, to obtain validation approval, industrial businesses that have filled in company data and submitted their latest quarterly company report must apply for validation as a small industry via SIINas. The application must include uploaded video evidence of the production process at the factory and a video of the business location, factory area or production area with geographic location information embedded (tagging).
“After that, the Ditjen IKMA Validation team will check the conformity of the company data and videos within a maximum of ten days from the date the application is received. The team may also carry out checks directly in the field or online,” Reni explained.
As of 22 February 2026, 121 companies had been validated as Small Industries. These companies are the ones that can apply for self declare TKDN.
In addition, the Director General of IKMA also set out the details of the main components of SMI-sector goods to be used in calculating TKDN values through self declare or through an Independent Verification Body (LVI) appointed by the Minister of Industry, based on IKMA Director General Regulation Number 263 of 2025. In this regulation, main components are the essential parts or elements that form, determine and affect the function, quality and characteristics of a product.
The regulation on main component details consists of two parts. Annex 1 contains the types of goods and details of main components that can be used to calculate the TKDN value of goods by small and medium industry businesses in the food, furniture and building materials, chemicals, clothing and crafts, and metal, machinery, electronics and transport equipment sectors. Annex 2 is used by both SMIs and large industries in the miscellaneous sector.
The Director General of IKMA said the TKDN assessment weighting for self declare is the same as LVI TKDN, consisting of 75 percent direct materials including main components, 10 percent direct labor and 15 percent factory overhead. “The main principle is that as long as an industrial company invests and produces, including having its own factory and production equipment in Indonesia, with all or part of the work done by Indonesian citizens, a minimum TKDN value of 25 percent can be achieved,” Reni explained.
The Director General of IKMA said that if the goods submitted by a small industry business are not listed in IKMA Director General Regulation Number 263 of 2025, they may also refer to Agro Director General Regulation Number 5 of 2025 on Details of Main Components of Agro-Industry Goods for TKDN Calculation, IKFT Director General Regulation Number 3 of 2025 on Details of Main Components of Chemical, Pharmaceutical and Textile Industry Goods for TKDN Calculation, and ILMATE Director General Regulation Number 6 of 2025 on Details of Main Components of Metal, Machinery, Transport Equipment and Electronics Industry Goods for TKDN Calculation.
The main components of the goods listed in all these regulations are based on cost structure, and may also include components that are low in cost but prioritized for domestic development. The lists of goods and main components were determined by each supervising Directorate, involving the relevant associations and industrial companies.
“We will review and evaluate these lists at least once a year and at any time if necessary,” the Director General of IKMA said.
Source: Press Release of the Ministry of Industry of the Republic of Indonesia