Jakarta. Finance Minister Purbaya Yudhi Sadewa recently revealed that the massive imports of Indian pickup trucks would use loans from state banks. 

State-owned agricultural firm Agrinas Pangan Nusantara is set to purchase 105,000 Indian-made trucks as part of the Red and White Village Cooperatives program. This nationwide initiative aims to cut food distribution change to make prices more affordable. But this ambition calls for transport to carry food crops and other goods. Amid backlash towards the import plan, Purbaya disclosed how the financing would go. 

Every year, Indonesia allocates a portion of the state budget to the so-called village funds, with the money going into spurring the country’s rural development. A portion of that village's funds goes towards establishing the cooperatives, including paying off the loans for the pickups. 

“The cooperatives would borrow money from the state banks. My task at the Finance Ministry is to be able to pay Rp 40 trillion (or around $2.4 billion) over the next six years,” Purbaya told a press conference in Jakarta on Monday.

“So the risk is clear. It won’t place additional fiscal [burden] because we have always allotted village funds. The money will come from that allotment. It’s just how we spend the money that changes,” Purbaya said.

The contracts for the Indian pickup are valued at Rp 24.66 trillion ($1.5 billion). The Indian automakers supplying these trucks are Mahindra and Tata Motors. The deliveries will take place in phases until the year-end.

In 2026, Indonesia earmarked 58.03% of the village funds or approximately Rp 34.57 trillion ($2 billion) to bankroll the cooperatives program, including the enterprises’ infrastructure and operations. The full-year budget for village funds stands at Rp 60.57 trillion ($3.6 billion). 

The import plan has drawn flak from domestic automakers and lawmakers. Estimates run by the think-tank Celios even revealed that the ill-timed procurement could create Rp 39 trillion (around $2.3 billion) of economic losses. As many as 330,000 people in the domestic car industry can also lose their jobs.