Investment Framework

Indonesia’s investment framework places strong emphasis on downstreaming (hilirisasi) — the policy of moving beyond raw material extraction toward higher-value processing and manufacturing. This policy is reflected in the Priority Investment List and in the design of incentives and licensing frameworks.

Downstreaming is particularly relevant for investors in natural resources, manufacturing, and strategic supply chains, where incentive eligibility and licensing expectations may align with national industrialization objectives. The policy focus is especially visible in sectors such as mining, minerals processing, energy, agriculture, fisheries, and plantations. Manufacturing industries, including metals, batteries, petrochemicals, food processing, and automotive components, play a central role in downstreaming efforts, as they support the creation of domestic value chains and reduce reliance on imported intermediate goods.

To support this agenda, the government has prepared a Strategic Downstreaming Investment Roadmap covering 28 commodities across eight priority sectors (including minerals, coal, oil, gas, plantations, marine, fisheries, and forestry). The roadmap is expected to generate substantial investment, employment, export value, and long term contributions to GDP.