In the midst of an economy that has not yet fully recovered from the pandemic, the government is optimistic that the strengthening of the domestic industry will continue to achieve the import substitution target of 35 percent next year.
Minister of Industry Agus Gumiwang Kartasasmita said that the targets set before the pandemic or early 2020 were still realistic to be realized.
One of the strategies is to focus on five main sectors and two additional sectors.
“In early 2020 the target of 35 percent [import substitution]. Is it still realistic now? We are trying," he said during a working meeting at the DPR.
The five main sectors that will be the focus of the Ministry of Industry (Kemenperin), are the food and beverage, textile and clothing, automotive, electronics, and chemical industries. Recently, two sectors were added as a result of Covid-19, namely medical devices and pharmaceuticals.
Agus said that the achievement of import substitution at a number of directorates overseeing these priority sectors was on track to achieve the target.
The Directorate General of Chemical, Pharmaceutical and Textile Industries, for example, has achieved import substitution of up to 21 percent.
Meanwhile, at the Directorate General of Agro Industry, the figure reaches 18 to 19 percent. In addition, so that domestic products are well absorbed in the domestic market, the Ministry of Industry also encourages the achievement of domestic content level requirements (TKDN), so that it can help absorption by government procurement.
Another strategic effort, namely limiting imported products that are displayed on the e-catalog of the Government Goods/Services Procurement Policy Institute (LKPP). A total of 79 types out of a total of 358 types of domestically produced medical devices can replace imported products in the LKPP e-catalog.
"So our task is to encourage production, but investors look at the market, break even points, TKDN is also an instrument, SNI is mandatory, that's one way we can prevent the flood of imported goods," he said.