Indonesia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in indonesia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Selling to the Public Sector
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Selling to the Government

Selling to the Indonesian government generally requires engagement through a local agent, distributor, or representative. While not always mandated by law, using a qualified local partner is strongly advised. A trusted Indonesian counterpart can provide invaluable support in navigating procurement procedures, ensuring compliance with evolving regulations, and building relationships with government buyers. This local engagement is especially critical in a market where relationships, trust, and cultural fluency are essential for business success.

Indonesia’s national public procurement system is managed by the National Public Procurement Agency, known as LKPP (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah). LKPP oversees procurement regulations and maintains two key platforms: the SPSE system, which manages e-tendering processes, and the e-Catalogue system, which allows registered vendors to offer goods and services directly to government agencies. The e-Catalogue system continues to expand its coverage and now includes a growing list of product categories beyond its traditional focus on heavy equipment, pharmaceuticals, medical devices, motorized vehicles, and information technology. Entry into the e-Catalogue system requires the vendor to be a locally registered Indonesian entity, and many U.S. firms work with local partners to gain access.

Medicines, medical equipment, and food-related items must be registered with Indonesia’s relevant authorities such as BPOM (National Food and Drug Authority) or the Ministry of Health in order to be eligible for inclusion in public procurement processes. The use of LKPP’s centralized systems is mandated for procurement by national ministries, while provincial and local governments are gradually increasing their adoption.

The five main procurement methods regulated by LKPP include: (1) e-purchasing via the national e-Catalogue system; (2) direct purchase for low-value procurement; (3) direct vendor appointment for urgent or specialized needs; (4) limited tenders for select vendors; and (5) open tenders for competitive bids. The appropriate method depends on the contract value, the availability of local suppliers, intellectual property protections, and the strategic or security-sensitive nature of the goods or services. In limited circumstances, exemptions may be granted for urgent needs or in the absence of adequate competition.

Indonesia is not a party to the WTO Agreement on Government Procurement (GPA) but has maintained observer status since October 2012. While GPA accession could offer greater transparency and open access for international firms, Indonesia’s current regulatory framework limits foreign participation in some public sector projects, particularly those deemed strategic.

Many public infrastructure and procurement projects in Indonesia are financed by loans or grants from multilateral development banks, such as the World Bank, Asian Development Bank (ADB), and the Islamic Development Bank. These projects often adhere to the procurement guidelines of the respective multilateral institutions and can offer U.S. exporters opportunities to compete on a more level playing field. For more information, see the “Trade and Project Financing” section of this guide.

U.S. companies bidding on government tenders in Indonesia may also be eligible for U.S. Government advocacy support through the Advocacy Center, a unit of the U.S. Department of Commerce’s International Trade Administration. The Advocacy Center coordinates interagency efforts to support U.S. exporters pursuing public sector contracts abroad. Support may take the form of letters of endorsement, coordinated embassy outreach, or direct engagement with Indonesian authorities. The center works closely with U.S. Commercial Service officers at the U.S. Embassy in Jakarta to ensure U.S. companies receive the backing necessary to compete effectively and transparently. For additional details, consult the Advocacy for Foreign Government Contracts for additional information.

Financing of Projects 

Infrastructure development continues to be a central priority in Indonesia’s national development agenda. Under the 2020–2024 National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional, or RPJMN), the Government of Indonesia (GOI) projected a total infrastructure investment need of approximately USD 437 billion. The funding sources are expected to be diversified: 41.25 percent is projected to come from the national and regional government budgets (APBN/APBD), 22.23 percent from state-owned enterprises (SOEs), and the remaining 36.52 percent from private sector entities through public-private partnerships (PPPs), project financing, and foreign direct investment. For more detailed information and project tracking, visit the Ministry of National Development Planning (BAPPENAS) at www.bappenas.go.id.

Given the substantial funding gap and the government’s limited fiscal space, there is strong interest in attracting international capital and expertise to support infrastructure delivery. The GOI encourages innovative financing mechanisms, including blended finance, infrastructure financing facilities, and the use of guarantees and viability gap funding to mitigate investor risk. Strategic sectors identified for major investment include energy, transportation (rail, ports, and airports), digital connectivity, and water resources.

U.S. companies interested in pursuing infrastructure and development-related opportunities should be aware of financing resources available through multilateral development banks (MDBs), particularly the World Bank and the Asian Development Bank (ADB). These institutions provide billions of dollars in concessional loans, technical assistance, and grants annually for projects aimed at accelerating sustainable economic growth, improving public services, enhancing climate resilience, and reducing poverty. MDB-funded projects are often subject to transparent procurement processes, creating a more level playing field for U.S. firms.

The U.S. Commercial Service maintains dedicated Commercial Liaison Offices at both the World Bank and the Asian Development Bank. These offices support American companies in navigating MDB procurement procedures, identifying upcoming opportunities, and advocating on behalf of U.S. bidders during the tendering process. U.S. firms are encouraged to engage early in the project development cycle and monitor MDB pipelines for project leads.

Additionally, U.S. companies may benefit from support offered by the U.S. International Development Finance Corporation (DFC), which provides political risk insurance, debt financing, and equity investment for commercially viable development projects in emerging markets, including Indonesia. Collaboration with DFC, USTDA, and EXIM Bank can enhance the competitiveness of U.S. bidders seeking to engage in Indonesia’s priority infrastructure projects.

To learn more about MDB-supported opportunities and how to participate in these projects, U.S. exporters should contact the Commercial Liaison Offices to the Asian Development Bank and the World Bank.

Resources 

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