Jakarta. Indonesia defended Thursday its decision to restrict the entry of imported consumer goods starting in March, saying that such a move is necessary to defend its micro, small, and medium enterprises (MSMEs).

The Trade Ministry last year launched a regulation that would lead to a more stringent inspection of imported goods. Indonesia today is adopting a “post-border” monitoring system for imported consumer goods. In other words, the government -- via the related ministries -- is monitoring the imported goods only after they get distributed in the market.

To protect its MSMEs from direct competition with imported goods, Indonesia is switching to a “border” system under which the imported goods will get checked by customs authorities, according to Trade Minister Zulkifli Hasan. The policy will take effect on March 10.

“Before this [regulation], imported consumer goods, be it clothes, cosmetics, toys, among others, can immediately make it to stores under the post-border system. Under the upcoming border system, these consumer goods will have to go through customs authorities. Importers also have to get a permit,” Zulkifli told reporters in Jakarta.

“Even though I received protests [for restricting its entry], it makes sense to restrict its entry and facilitate export, because we are trying to protect our MSMEs and the domestic industry,” Zulkifli said. 

Countries across the globe are trying to ward off the influx of imported goods, according to Zulkifli. As a case in point, seven years have passed since Indonesia and the European Union (EU) launched the negotiations for a trade pact. Zulkifli added: “See? They [The EU] are trying to protect their markets from imports.”

According to the Trade Ministry, electronics, footwear, apparel, cosmetics, and herbal medicines will be subject to the border system under this regulation. 

Despite tougher requirements for some consumer goods, the same regulation makes it easier for Indonesians working overseas to send imported goods back home. The regulation on imports from Indonesian migrant workers already came into effect last month.

Trade Ministry data showed that China, Japan, and Thailand were the three largest sources of non-oil and gas imports in January-November 2023. Indonesia recorded $56.74 billion over the said period, followed by Japan ($15.20 billion) and Thailand ($9.36 billion). Indonesia also posted an accumulated trade deficit worth $2.69 billion with Thailand. 

“We need to be careful. Thailand is our third-largest source of [non-oil and gas] imports. We must not let every durian and coconuts in our country come from Thailand,” Zulkifli said.

Government data shows that Indonesia is home to 64.2 million MSMEs. The sector represents 61 percent of the country's gross domestic product (GDP).

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