Automotive industry under pressure
When Indonesia signed the Agreement on Reciprocal Trade with the United States in July 2025, the announcement was met with celebratory headlines. More than 99 percent of US products—including cars, auto parts, and electric vehicles—are now eligible for zero tariffs when entering the Indonesian market. But behind the rhetoric of “trade victories” lies a sobering question: what does this mean for Indonesia’s domestic automotive industry?
Can medical device industry survive a zero-tariff future?
The Agreement on Reciprocal Trade grants more than 99 percent of U.S. products—including pharmaceuticals and medical devices—zero-tariff access to the Indonesian market. The agreement goes further, removing many non-tariff barriers as well. Most significantly, Indonesia now recognizes FDA certifications and prior market authorizations for U.S.-made medical devices.
Hydrogen Peroxide Update
State-owned ammonia and fertilizer producer PT Pupuk Iskandar Muda (PIM), a subsidiary of Pupuk Indonesia (Holding), acquired PT Asean Aceh Fertilizer (AAF) in late 2018. Following the acquisition, PIM planned to revise AAF’s hydrogen peroxide (H2O2) plant that is left dormant for many years due to limited natural gas supply.
EV Industry Update
Amidst concern about sweeping changes in domestic manufacturing related to ‘trade concessions’ made by Indonesian government to USA, minister of industry Agus Gumiwang Kartasasmita, stated that the local content policy (TKDN) will still apply to certain products from US.
Those continue to expand
While Indonesian players closed down operations, China-based company PT Xinhai Knitting Indonesia has recently built a textile factory in Brebes, Central Java province with US$40 million of investment (approximately Rp648 billion). Sitting on 8 hectares of land, the textile factory will focus on producing knitted fabrics.
A more aggressive Xpeng in Indonesia
Xpeng is among the fastest growing EV player in the world. In the first half of 2025, the company delivered nearly 200,000 Smart EVs, already surpassing its full-year 2024 deliveries. Last month alone, Xpeng delivered nearly 35,000 vehicles, skyrocketed 224% year-on-year. How about Indonesian operation?
Growing investments from Chinese F&B
Last year’s SIAL-Interfood exhibition in Jakarta was interesting because out of 1,200 participating companies, China dominated with over 250 participants. Some of them have buit local factories. Four years ago, dairy giant Yili Group opened one of the largest ice cream factories in the country.
BYD & Indonesian operation
Shares of BYD Co Ltd ended flat on Wednesday (Jul 2) to make a market capitalisation of RMB1 trillion or around US$139.5 billion. BYD is now worth about half of Toyota Motor Corporation (TMC), which dominates automotive market in Indonesia until now.
From bad to worse for textile & garment
Hundreds of workers at garment producer PT Ricky Putra Globalindo (RICY) Tbk staged a protest this week for consistent delay in the payment of salary in the past 12 months or so even when the company already slashed nearly 1,000 employees in the past few years.
Weaker steel output
Crude steel production from 70 countries reporting to the World Steel Association, which accounted for approximately 98% of the total world crude steel production, declined 3.8% year-on-year in May 2025, dragged down by 4.7% drop in Asia and Oceania, the single largest production region.