The existence of big international e-commerce platforms such as Alibaba and Lazada in combination with rising per capita GDP and purchasing power in Indonesia gives rise to a growing flow of imported products into Indonesia.

The Indonesian government, however, would like to curb such imports (especially when it involves consumption goods, contrary to capital goods) to safeguard a healthy trade balance and reduce pressures on the rupiah exchange rate. Therefore, the government is also highly supportive of import substitution industrialization.

Indonesian Coordinating Economic Minister Darmin Nasution said, on Friday (08/12), that all e-commerce products that are imported into Indonesia will become subject to an import tariff. Currently, based on international regulations, only relatively cheap e-commerce products (valued below USD $100) are free from an import tariff in cross-border traffic that involves Indonesia.

Indonesian Finance Minister Sri Mulyani Indrawati added that the Indonesian government is currently discussing cross-border trade because Indonesian consumers are ordering many foreign products through Internet.