Erfan Maruf, Jakarta – Indonesia has introduced a six-month exemption from import duties on selected plastic raw materials to help domestic manufacturers cope with soaring international prices and maintain their competitiveness, Coordinating Economic Affairs Minister Airlangga Hartarto said Wednesday.
The measure, established under Finance Ministry Regulation No. 68/2026, which was promulgated on Oct. 2, temporarily reduces import tariffs on certain polyethylene and polypropylene products to 0%.
Airlangga said the policy followed President Prabowo Subianto's instructions to safeguard domestic industries against volatile global market conditions and rising raw material costs.
"The main priority is to meet the raw material needs of domestic industries while taking into account local supply conditions and developments in international market prices," Airlangga said in a statement.
According to international price data cited by the government as of Oct. 13, polypropylene prices had risen approximately 42.79% from a year earlier, while polyethylene prices had increased 27.87% over the same period.
The sharp increases have raised concerns about higher production costs and potential disruptions to domestic industrial supply chains, particularly for manufacturers that depend on imported plastic feedstocks.
By eliminating import duties on selected materials, the government hopes to ease cost pressures, support production continuity and strengthen the competitiveness of Indonesia's plastics industry.
"The government remains committed to maintaining the sustainability and improving the competitiveness of national industries through policies that respond to developments in global markets," Airlangga said.
Six tariff categories covered
The regulation sets a 0% most-favored-nation (MFN) import duty rate for six tariff classifications covering polyethylene and polypropylene.
The temporary measure is intended to make eligible imported raw materials more affordable for domestic manufacturers while taking into account the availability of local supplies.
Airlangga said the government would closely monitor and evaluate implementation to ensure the incentive benefits its intended recipients and delivers meaningful support to the manufacturing sector.
However, preliminary feedback from industry participants has raised questions about whether the eligible products adequately match the needs of downstream manufacturers.
According to information received from businesses, most of the plastic raw materials currently benefiting from the measure are supplied in liquid form.
That may limit the incentive's usefulness for downstream industries, including packaging and household goods manufacturers, which generally require plastic resins in pellet form for their production processes.
The government has acknowledged the concern and pledged to consider industry feedback when evaluating the measure and determining whether further adjustments are necessary.
"We will listen to input from various stakeholders to ensure the policy is implemented effectively and that its benefits reach the industries it is intended to support," Airlangga said.