Indonesia’s Industry Faces Challenges, Grows 4.9 Percent

One year after President Prabowo Subianto and Vice President Gibran Rakabuming Raka took office, Industry Minister Agus Gumiwang Kartasasmita outlined the sector’s challenges at a press conference in Jakarta. He highlighted the influx of cheap legal and illegal imports and the sale of Bonded Zone products in the domestic market.

He noted that the Russia‑Ukraine and Iran‑Israel conflicts, together with quota policies and rising gas prices, have disrupted supply chains and raised production costs. He stressed that protection is vital because 80 % of manufactured goods are consumed locally, supporting 19.6 million workers and investment.

Nevertheless, the non‑oil manufacturing sector grew 4.94 % year‑on‑year from Q4 2024 to Q2 2025, contributed 17.24 % of GDP, exported US$202.9 billion (78.75 % of total exports), attracted Rp568.4 trillion investment (40.72 % of total) and employed 19.55 million people (13.41 % of the workforce). The minister reaffirmed commitment to protect industry, boost production utilization and strengthen technology for competitiveness.