Minister of Industry Agus Gumiwang Kartasasmita has inaugurated a new policy on the Domestic Component Level (TKDN) by issuing Regulation of the Minister of Industry Number 35 of 2025 on the Provisions and Procedures for TKDN Certification and Company Benefit Weight (BMP). The reform is considered a big step toward a system that is cheaper, easier, faster, more transparent and accountable, further encouraging investment and strengthening the competitiveness of national industry.
“This reform is built on four main pillars: incentives, simplification, ease and speed. These four pillars give rise to 13 important, fundamental changes,” the Minister of Industry told journalists in Jakarta on Thursday (11/9).
Under the incentive pillar, changes were made to reward industry players that carry out research and development. Whereas R&D activities previously earned no added value, the reform now provides an additional TKDN value of up to 20 percent.
In addition, companies that invest at home also receive an incentive in the form of a minimum TKDN value of 25 percent. Meanwhile, the Company Benefit Weight (BMP), which used to be difficult to achieve at a maximum of 15 percent, is now easier because there are 15 components forming the BMP value to choose from.
The second pillar is simplification. Whereas TKDN for goods used to be calculated on a cost basis with fairly complex requirements, the approach has now been simplified without having to calculate all costs, except for industrial services.
For materials, the TKDN value is now looked at directly at the second tier, and if there is none, the origin of the goods is used. The validity period of TKDN and BMP certificates, previously only three years, has been extended to five years with a more structured supervision system.
Third is the ease pillar. This reform brings a breakthrough for small industries. Whereas their TKDN value used to be capped at 40 percent with certificates valid for only three years, through the self declare method small industries can now obtain a TKDN value of more than 40 percent with certificates valid for up to five years.
There are also changes in how TKDN values are displayed. Whereas consumers used to have to search a list of certified goods to find out the TKDN value, the value is now shown directly on product labels and packaging.
R&D, which was previously calculated on a cost basis, is now simplified through intellectual aspects. Even TKDN certification for industrial services, which previously had no clear procedure, can now be applied for by calculating the cost components of labor, equipment and general services.
The final pillar is speed. The time needed for TKDN certification has also been cut significantly. Certification through an Independent Verification Body (LVI), which previously took 22 working days, can now be completed in just 10 working days.
For small industries, which previously needed five working days after documents were complete, it now takes only three days. Calculating direct labor content and factory overhead, which previously involved complicated cost compositions, is now simplified through a checklist of the forming components.
TKDN calculation also no longer has to go down to the third tier, but only to the first tier, by looking at the TKDN certificates and domestic content held by companies at the next level.
Besides reforms in incentives, simplification, ease and speed, the government has also tightened supervision and sanctions. Improper practices such as TKDN washing, submitting false documents, breaching commitments and forging certificates will be dealt with firmly.
Sanctions that can be imposed range from revoking TKDN certificates and revoking the appointment of verification bodies to recommending sanctions for procurement officials in ministries, agencies, state-owned enterprises and regional-owned enterprises.
“The TKDN reform is a response to the needs of the business world and a concrete form of the government's support for domestic industry. We want to ensure that Indonesian industry not only survives, but can leap forward and bring real benefits to the nation and its people,” Agus stressed.
Kemenperin records that as of 11 September 2025, 88,218 industrial products had been TKDN-certified, involving more than 15,000 industrial companies in various sectors. This has had a significant impact, including sustaining production, absorbing labor, increasing tax revenue and supporting national economic growth.
TKDN Certificates for the iPhone 17
In line with the TKDN reform, Kemenperin also announced the issuance of four TKDN certificates for iPhone 17 products submitted by PT Apple Indonesia. The certificates were issued on 11 September 2025 after the products were declared to meet the requirements of Ministerial Regulation Number 29 of 2017 on the Provisions and Procedures for Calculating TKDN Values.
Agus stressed that issuing these certificates not only confirms Apple's commitment to comply with national regulations, but also continues Apple's strategic investments in Indonesia outside the TKDN scheme, including building the Apple Developer Academy and digital talent ecosystem development programs.
“Apple's investment continues alongside the issuance of TKDN certificates for the iPhone 17. This proves that Indonesia remains an important partner for global companies in building innovation-based industrial value chains,” Agus said.
The Minister of Industry said the TKDN reform and global investment commitments such as Apple's will be the foundation for national industrial growth in the future. “With the TKDN reform, we want to ensure that Indonesian industry not only survives, but can leap forward and bring real benefits to the nation and its people,” he concluded.
Source: Press Release of the Ministry of Industry of the Republic of Indonesia