Fahri Ali, Jakarta – Indonesia's retail sector has urged the government to ease import restrictions and improve product availability, saying fewer policy constraints could unlock stronger consumption and help support the government's 6% economic growth target.

Indonesia Retail and Tenant Association (Hippindo) Chairman Budihardjo Iduansjah said the retail sector still had room to expand, particularly as household consumption remains a key driver of the national economy.

"If government policies continue to restrain economic activity, growth may only remain stable. If the economy is given more room, it could grow," Budihardjo said at the Indonesia Retail Summit & Expo 2026 in Pantai Indah Kapuk, Jakarta, on Wednesday.

Some of the industry's main concerns are the availability of imported goods and raw materials. Retailers say complex import rules and restrictions can limit product availability, particularly for global brands and products that have yet to be manufactured domestically. Budihardjo said legitimate imports that comply with regulations and contribute to state revenue through taxes should not be excessively constrained.

Indonesia's import regime requires additional approvals and technical requirements for some categories of goods. Rules vary by product and can change over time, adding to the time and administrative costs of importing goods.

"If businesses are willing to pay taxes and import goods legally, don't put on the brakes. They are willing to pay taxes," he said.

Despite concerns over purchasing power and economic policies, several retail segments continue to post strong growth. Food and beverage, cosmetics, and electronics, particularly mobile phones, have recorded positive performance.

"Some categories are actually growing by more than 10%. F&B is doing well, cosmetics are also performing well, as are electronics. But some segments are below that level," Budihardjo said. "The large hypermarkets are the ones facing more difficulties and are seeing declines. But convenience stores are still growing and performing well, as are minimarkets," he added.

To sustain growth, retailers are introducing new products, expanding promotions and store networks, and improving operational efficiency. Digitalization, particularly in warehouse management and supply chains, is also helping companies reduce costs and offer more competitive prices.

"The strategy includes new products, innovations, new players, promotions, opening more stores, and lowering prices through efficiency. Advanced warehouse digitalization also helps reduce costs," Budihardjo said.

Chief Economic Affairs Minister Airlangga Hartarto said the government was targeting economic growth of 6% by the end of the year and into the following year, with the retail sector expected to play an important role in achieving that goal.

"The retail sector continues to drive our economic growth, especially because this is an industry where the owners are directly on the ground," he said.

Airlangga added that the sector's resilience also reflected the strength of Indonesia's domestic economy amid global challenges, including geopolitical conflicts, the prolonged Russia-Ukraine war, and trade tensions between the United States and China.

The government, however, acknowledged that limited supplies remain a challenge for retailers, particularly for products that depend on overseas sources.

Airlangga said the government did not want thin inventories to push Indonesian consumers to shop abroad.

"We do not want stock supplies to be too limited, causing Indonesians to shop elsewhere overseas. With greater availability, more people will shop here," he said.

The government plans to strengthen supply chains and improve product availability while also increasing domestic supplies to reduce reliance on imports.

Airlangga also highlighted the potential of shopping tourism, saying Indonesia should capitalize on rising foreign tourist arrivals by encouraging visitors to spend more on shopping and dining while in the country.

"Tourists spend part of their money on food and shopping. We need to encourage them to shop in Indonesia," he said.

He added that Indonesians spent around $6.7 billion on overseas travel services and said stronger domestic shopping and tourism could help retain a larger share of that spending within the country.

Indonesia Retail Summit & Expo 2026 committee head Haryanto Pratantara said Indonesia had significant potential to develop shopping tourism, supported by competitive prices and an increasingly diverse range of products.

"If these conditions can be maintained, Indonesia should be able to attract more tourists because the three main elements of tourism are already there: attractions, food, and shopping," Haryanto said.

Source: https://jakartaglobe.id/business/retailers-call-for-easier-imports-to-support-economic-growt