The government is considering a plan to force all Internet of Things, or IoT, device manufacturers to source most of their materials from Indonesia, setting up a barrier that would help keep the country's trade balance in check. (Antara Photo/Nova Wahyudi)

Indonesia Mulls Local Content Requirements for Internet of Things

BY :JAKARTA GLOBE

OCTOBER 18, 2017

Jakarta. The government is considering a plan to force all Internet of Things, or IoT, device manufacturers to source most of their materials from Indonesia, setting up a barrier that would help keep the country's trade balance in check.

The Ministry of Communication and Information Technology said that it plans to impose a domestic content regulation, known as TKDN, on IoT devices, similar to the regulation now implemented on 4G-enabled devices, such as mobile phones, computers and tablets.

"After two years of implementing TKDN, there has been positive results. Imports of the devices dropped dramatically from $3.5 billion two years ago to under $1 billion," Ismail, the director general of postal and informatics resources and equipment at the ministry, said on Monday (17/10).

In addition, global tech companies that open local assembly plants or research and development facilities in the country must comply with regulation, opening job opportunities and bringing in taxes to government, Ismail said.

Yet, the government is not rushing to pass the regulation considering IoT technology is still largely premature.

"We do not want to strictly regulate a sector that is still dynamically changing because we need space for anyone to innovate," Communication and IT Minister Rudiantara said.

The minister promised that the government would involve businesses and manufacturers to formulate IoT rules and regulations.

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