Indonesia - Country Commercial Guide
Market Opportunities

Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.

Last published date: 2020-10-11

Consumer-related market opportunities continue to lead growth in the world’s fourth- largest country, and expansion in the retail, health, education, telecom and financial services sector have boomed in the last few years. The Indonesian consumer is ranked as one of the most confident in the world, and approximately 50% of Indonesia’s 270 million citizens are under the age of 30.

Indonesia’s aviation market is growing at 20% per year and favors U.S. products. Aircraft replacement parts and services is a valuable and significant market. There is also demand for air traffic control and airport logistics services and ground support equipment. With high growth, Indonesia aviation market require infrastructure, training, and components in order to keep their business running. Aircraft maintenance, repair and overhaul in Indonesia is estimated to reach USD 2 Billion per year for the next five years.

A competitive and expanding banking market offers significant opportunities for IT and banking equipment, software and technology providers. There are opportunities for telecommunication infrastructure such as satellites and ground stations, handheld devices, and also integration devices or enablers. Telecommunications equipment and services and satellites remain excellent areas for American products and services, which have a comparative advantage technologically.

Indonesia’s under-developed public infrastructure remains a major national challenge and presents opportunities in aviation, rail, ports and land transport, as well as in municipal infrastructure projects such as water supply, wastewater systems and waste management facility. From 2020 – 2024, Indonesia plans to develop transportation infrastructure including toll roads (2,724 km), new roads (3,224 km), and bridges (38 km). Projects to build mass transportation system (USD 8 billion) are planned for the six metropolitan areas of Jakarta, Surabaya, Bandung, Semarang, Medan and Makassar with the goal of reducing economic losses due to traffic jams.

Indonesia's Kerjasama Pemerintah Dengan Badan Usaha (KBPU), the government agency that oversees public-private partnership projects, is preparing to develop major infrastructure including communication satelites, roads, airports, hospitals, and potentially cold storage and fish processing facilities. For further information, see http://kpbu.djppr.kemenkeu.go.id/en/. Interested U.S. companies can also reach out to the Indonesia Infrastructure Guarantee Fund (IIGF), which provides Indonesian government guarantees for PPP projects.

Important opportunities outside of Jakarta remain in energy and electricity transmission services.  Significant growth in power generation projects, conventional and renewable, and including IPPs, is expected to continue for the next decade. Emerging opportunities include palm oil, biofuel processing, clean energy, energy efficiency and technology to improve local production capacity, and dams, and waste-to-energy projects. For water and energy infrastructure, the government plans to build 18 multipurpose dams (USD 6.2 billion) that would supply 2.4 GW of power and clean water for daily needs.

As the Indonesian military expands its budget, there are opportunities for U.S. defense manufacturers to sell a range of military aircraft, vehicles, communications systems, spare parts, and maintenance services. Monitoring and protection of sea-borne traffic for both national security and fisheries enforcement presents new opportunities.

Education and professional training, medical equipment and high-quality American agricultural commodities all retain their market edge even with premium prices. The U.S. has consistently been a desired destination for Indonesian students seeking to study overseas. Currently there are approximately 9,000 Indonesian studying in the U.S.