The implementation of the local content level policy, known as TKDN (Tingkat Komponen Dalam Negeri), for smartphones entering Indonesia aims to promote domestic industry participation. However, experts warn that the current practice often involves incorporating only trivial components from Indonesia. This issue was highlighted by gadget analyst Aryo Meidianto, who stressed the importance of a more meaningful and balanced approach.
Aryo acknowledged that the TKDN policy is beneficial as it encourages foreign smartphone brands to include Indonesian components. Yet, he cautioned that the process should not be superficial or lax. "The policy must be continued but not done haphazardly," he told Selular. Aryo emphasized that managing TKDN is complex and time-consuming, requiring the simplification of bureaucratic procedures to make compliance easier for manufacturers.
Challenges in TKDN Implementation
The central challenge lies in the tendency of vendors to meet TKDN requirements by including low-value items. Aryo pointed out, "Usually, the only contributions from Indonesia are packaging boxes, some local applications that users may not even want, and sometimes chargers." These components contribute little to the smartphone’s intrinsic value or technology.
Such minimal contributions raise questions about whether Indonesia currently produces more significant parts like RAM modules or motherboards. Aryo suggested that if such components were available domestically, they could be incorporated into the TKDN calculation to add more substantive value. This reflects a broader industry challenge: how to boost Indonesia’s capacity to manufacture higher-tech components critical to smartphone production.
Need for Balanced Regulations
Aryo argued that TKDN regulations should apply evenly to all smartphone manufacturers entering Indonesia, regardless of origin. “TKDN should be measured from hardware, raw materials, software, applications, or investment, and everything must be balanced without exemptions,” he said. Currently, some American brands like Apple and Google Pixel reportedly receive exemptions, fueling debates over fairness.
The expert further noted that many brands have invested in assembling factories on Indonesian soil. This is a positive outcome, as the factories generate local jobs and support the industrial ecosystem. However, mere assembly does not equate to high local content if the valuable parts are predominantly imported.
Future Direction: Toward Higher-Value Local Production
The inclusion of inconsequential items to fulfill TKDN highlights the need for Indonesia to develop its electronics manufacturing capabilities further. Aryo sees this as a critical homework assignment for the country. "Indonesia should work toward producing components with higher sales value, such as chipsets, cameras, and other quality parts," he stated.
Achieving this would transform TKDN from a simple quota into a real driver of industrial development. Fostering local research, design, and manufacturing will enable Indonesia to advance from assembling basic hardware to fabricating core smartphone technology. This shift would better insulate the industry from global supply chain shocks and improve competitiveness.
Summary of Key Points:
- TKDN policy encourages local content in smartphones entering Indonesia.
- Current compliance often relies on trivial items like packaging and local apps.
- Regulations should be consistently applied to all brands without exemptions.
- Many smartphone brands have established factories in Indonesia, boosting employment.
- Indonesia needs to enhance its ability to produce advanced components like chipsets.
- Simplifying TKDN procedures will help manufacturers adhere to the policy more effectively.
- Achieving higher-value local production will strengthen Indonesia’s electronics sector.
The ongoing development of the TKDN framework demands careful balance. It must promote genuine local industrial content while avoiding superficial compliance that undermines its objectives. By addressing these challenges, Indonesia can better leverage TKDN as a tool to support sustainable growth in the smartphone manufacturing sector.
