Indonesia unveils three strategies to drive downstream investment, targeting $618.1 billion

Indonesia is promoting a three-part strategy to accelerate downstream investment: strategic planning, efficient implementation and competitive incentives. Deputy Minister of Investment and Downstreaming Todotua Pasaribu said the government wants incoming capital to remain competitive while supporting technological progress.

The policy calls for both foreign and domestic investment to flow into production facilities, technology transfer, research, innovation and more advanced manufacturing processes. Under its Strategic Investment Downstreaming Roadmap, the ministry has mapped opportunities involving 28 commodities in eight priority sectors.

The roadmap represents potential investment of $618.1 billion and could create three million jobs. To make implementation more predictable, the government is reforming business licensing through Government Regulation No. 28 of 2025 on risk-based licensing and by integrating services through the Online Single Submission system.

Indonesia is also offering targeted fiscal incentives, including tax holidays, tax allowances, master-list facilities and super tax deductions for high-value, sustainable downstream projects. Realized downstream investment totaled 300.1 trillion rupiah, about $19 billion, in the first half of 2026. That represented 29.7% of national investment and a 6.9% increase from the same period a year earlier.

Foreign direct investment accounted for 212.8 trillion rupiah, or 70.9% of the total, while domestic direct investment contributed 87.3 trillion rupiah. Projects outside Java received 227.3 trillion rupiah, or 75.7% of downstream investment, highlighting the government’s effort to spread industrial growth across the country.