The BRICS TimesIndonesia’s Industry Ministry is rolling out a bold strategy to shift the manufacturing sector’s export contribution from just 20 percent to a much higher 30 percent all while keeping the domestic market well-supplied and protected.
Indonesia Eyes a Bigger Global Slice for Its Manufacturing Sector
Indonesia’s Ministry of Industry has set its sights on a significant leap in manufacturing exports. The ministry wants to raise the sector’s export share from the current 20 percent all the way to 30 percent. At the same time, it wants to ensure that domestic demand stays well-served.
Industry Minister Agus Gumiwang Kartasasmita laid out the plan in an official statement on Tuesday. He noted that Indonesian manufacturing output currently leans heavily toward local consumption around 80 percent feeds the domestic market, while only 20 percent heads overseas. The ministry now wants to rebalance that to a 70-30 split with 30 percent going to exports.
“The domestic market remains the primary strength of the national industry. However, moving forward, we need to strengthen export-oriented industries to expand the global reach of Indonesian manufacturing products,” he said.
Strong Economic Backdrop Fuels Confidence
Kartasasmita described the push toward export-oriented manufacturing as a strategic move. He said it would build greater resilience for the sector and give Indonesian products a stronger footprint in international markets.
The numbers certainly back the optimism. Data from Statistics Indonesia (BPS) shows that Indonesia’s economy expanded by 5.61 percent year-on-year in the first quarter of 2026. Manufacturing itself grew 5.04 percent during the same period and it remained the top contributor to the country’s gross domestic product (GDP), accounting for 19.07 percent, or roughly Rp1,179.62 trillion (around US$64.8 billion).
Investment and Export Numbers Tell a Promising Story
On the investment front, the manufacturing sector attracted realized investments of Rp182.04 trillion that is 36.49 percent of Indonesia’s total investment intake. Manufacturing exports also delivered strong results, reaching US$75.57 billion in the January–April 2026 period alone. That figure made up 82.01 percent of the country’s total export value a striking share by any measure.
Protecting the Home Front While Going Global
Kartasasmita stressed that ramping up exports cannot come at the cost of the domestic market. He said the home market has long served as the bedrock of Indonesia’s industrial growth and protecting it remains non-negotiable.
To keep that balance, the Ministry of Industry is rolling out a mix of fiscal and non-fiscal incentives. It is also tightening import controls and strengthening mechanisms that shield domestic industries from unfair competition.
Local Currency Push to Ease Exchange Rate Pressure
One key part of the ministry’s strategy involves promoting Local Currency Settlement (LCS) frameworks. These arrangements allow trading partners to settle transactions in their own currencies reducing reliance on the US dollar and cushioning businesses against exchange rate swings.
“Expanding the use of local currencies in international trade transactions is a key instrument for mitigating exchange rate risks while improving transaction efficiency for domestic industrial players,” Kartasasmita said.
A Clear Roadmap for the Rest of 2026
The minister expressed confidence that his ministry’s 2026 targets are well within reach. He pointed to a set of priority initiatives driving that ambition accelerating industrial downstreaming, strengthening small and medium industries, building skilled industrial human resources, advancing green industrial transformation, and boosting productivity through innovation and technology adoption.
With manufacturing already anchoring Indonesia’s economic engine, the ministry’s 30-percent export target signals a clear intent to take Indonesian-made products from the factory floor to a far wider world.
Pratik Agrawal
Akshay Didwaniya
Aditya Didwaniya