Indonesia Economic and Trade Briefing

I. Simplified Import Tariff Policy to Boost Trade Facilitation
The Indonesian Ministry of Finance recently announced that starting March 5, 2025, the country will implement a simplified three-tier import tariff system (0%, 15%, and 25%) for eight specific categories of goods. Scientific books will continue to enjoy a 0% tariff, while rates for watches, cosmetics, steel, bags, textiles, footwear and similar products, and bicycles will be adjusted to 15% or 25%. Additionally, import duties for general goods valued between $3and$3and1,500 will be uniformly reduced to 7.5%, though this adjustment does not apply to the aforementioned eight categories. The ministry stated that this reform aims to streamline trade processes, reduce business costs, and enhance competitiveness for key industries.

II. New Capital Construction Milestone: Administration Building Officially Launched
On March 3, the Nusantara Capital Authority (IKN) announced the official operation of its five-story office building in the core government zone of the new capital, Nusantara, marking a critical step in the relocation plan. Designed with sustainability principles, the building is adjacent to the planned presidential palace and will serve as the administrative hub. Following a parliamentary bill passed in November 2024, Jakarta has been redesignated as a special economic zone, and the government plans to begin relocating civil servants to Nusantara in April 2025, accelerating the shift of the national administrative center.

**III. $40MillionDownstreamProjectstoAccelerateIndustrialUpgrading\ast \ast Indonesianeconomicauthoritiesrevealedplanstolaunch21downstreamindustrialprojectsin2025,totaling$40MillionDownstreamProjectstoAccelerateIndustrialUpgrading∗∗Indonesianeconomicauthoritiesrevealedplanstolaunch21downstreamindustrialprojectsin2025,totaling40 million in investment. These projects span resource processing and high-value-added manufacturing sectors. The government will also fund strategic initiatives, such as coal gasification, through its newly established sovereign wealth fund, aiming to optimize industrial structures, promote economic diversification, and strengthen Indonesia’s position in global value chains.

IV. Central Bank’s Online Currency Exchange Service Gains Popularity
Ahead of Ramadan and Eid al-Fitr, the Bank Indonesia (BI) online currency exchange platform (pintar.bi.go.id) has drawn significant public interest. Users can pre-book exchange amounts, locations, and times, with a single transaction capped at 4.3 million Indonesian rupiah (approximately RMB 1,903). On the first day of operation, over 300 people queued at the Al-Azhar Mosque exchange point in South Jakarta. Ahmad Ghozaki, a 45-year-old resident, exchanged 2.7 million rupiah (about RMB 1,195) for holiday expenses, while others, like Khoiriyah, exchanged 3.7 million rupiah (roughly RMB 1,637) for Eid al-Fitr bonuses. Users have urged BI to expand quotas and service points in Jakarta and surrounding areas to improve accessibility.

Summary
Indonesia’s recent reforms in tariffs, new capital development, industrial planning, and public services underscore its commitment to economic transformation and governance efficiency. Analysts believe these measures will further attract foreign investment, stimulate domestic demand, and inject long-term momentum into the nation’s development.