Comparison of TKDN Regulations in Indonesia with The People's Republic of China and Thailand in Improving Indonesia's Investment Climate
DOI:
https://doi.org/10.29303/ulrev.v10i2.513Keywords:
Local Component Requirements (LCR), Supply Chains, Industrial Policy, Foreign Direct Investment, Investment IncentivesAbstract
Global supply chain shifts following the pandemic and rising geopolitical risks have prompted investment diversification. This paper reviews weaknesses in Indonesia's Local Component Requirements (LCR/TKDN) regulation and compares it with policies in China and Thailand. Findings show that Indonesia's TKDN remains fragmented, overly administrative, and poorly linked to incentives, creating compliance burdens and reducing FDI attractiveness. China demonstrates a coordinated protectionist model, while Thailand adopts a more investor-friendly incentive-based approach. The output of this paper is to recommend regulatory harmonization, incentive integration, and streamlined certification to reposition TKDN as a tool for industrial upgrading rather than an investment barrier.
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Copyright (c) 2026 Nicholas Tandrew, Prita Amalia, Purnama Trisnamansyah
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