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Indonesia reviews import rules after business group complaints

In World
April 05, 2024

JAKARTA (Reuters) – Indonesia is evaluating regulations designed to curb imports of more than 3,000 products, a senior trade ministry official said on Friday, following industry concerns the rules could disrupt the domestic supply chain and disrupt exports.

Southeast Asia’s biggest economy issued a regulation late last year to tighten monitoring for many imported goods, from food ingredients to hand tools to chemicals. Authorities said they were responding to complaints from business associations about the impact on local markets of an influx of imported goods.

But Business groups have since said new rules, which took effect on March 10, have restricted their access to some of the raw materials they need.

“Everything is still under evaluation, we continue to coordinate with the relevant ministries and institutions,” Trade Ministry official Budi Santoso told Reuters.

Following complaints and warnings of shortage, the trade ministry last month eased restrictions for aircraft spare parts and raw materials for the plastic industry. But business groups say the need the rules to be relaxed further.

The government did not ban imports under the complex rules, but require treatments that differ between goods. Most importers are required to obtain a permit and for the goods to be inspected at a customs check point.

The Indonesian Association of Food and Beverage Entrepreneurs (GAPMMI) said restrictions on imports of food ingredients, such as fortification mix, meant current stocks would only last a few months. Fortification mix, which boosts nutritional content, is mandated by national standards to be blended into processed foods such as flour and cooking oil.

“We don’t want raw materials to be included (in the restriction list). If they restrict finished products, it’s okay, but for raw materials, it should not be made complicated,” GAPMMI chairman Adhi S. Lukman said.

The Indonesian Chamber of Commerce and Industry said inappropriately targeted restrictions could disrupt operations in export-oriented industries, including automotive, mineral smelting and electronic manufacturing, as well as the food and beverage sector.

(Reporting by Bernadette Christina and Stefanno Sulaiman; Editing by Gayatri Suroyo and Barbara Lewis)

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