In a bid to increase Indonesia’s industry competitiveness, Indonesia’s President Joko Widodo inaugurated 11 bonded logistics centers on Thursday (March 10). The Indonesian government, through these logistics centres, aims to curtail the country’s ever-increasing logistics cost.
This was part of the country’s second economic stimulus package that was unveiled on September 30 last year.
At a bonded logistics centre, imported goods, which can be subject to certain tax incentives, are stored to be later distributed to the industries. Currently, however, the bulk of goods imported by Indonesian companies are stored in Singapore or Malaysia, owing to which the logistics costs rises steeply.
Also Read – TPP’s ‘yarn-forward’ clause may hinder Indonesia’s textiles business
Industry captains are excited over the launch of the logistics centres. In this regard, Ernovian Ismy, Secretary General of the Indonesia Textile Association (API), said that these centres could curtail the costs incurred by textile companies by up to 34 per cent
Meanwhile, Indonesia’s Finance Minister Bambang Brodjonegorosaid that the flow of goods at these centres will be closely monitored by Indonesia’s Tax Department in order to combat illegal activities.
According to the estimates, the Indonesian authorities expect to see the existence of 50 such bonded logistics centres in the country by next year.