Indonesia Slashes Tariffs to 0% for Aviation MRO and Petrochemicals to Counter Global Headwinds

JAKARTA, Investortrust.id — Indonesia has officially eliminated import duties on essential supplies for the aircraft Maintenance, Repair, and Overhaul (MRO) sector and Liquefied Petroleum Gas (LPG) used as petrochemical feedstock.

The Ministry of Finance enacted Finance Minister Regulation (PMK) No. 50/2026 as a core component of the government's Second Half 2026 Economic Stimulus Package.

The fiscal intervention directly addresses rising global macroeconomic pressures, aiming to lower domestic production costs and preserve industrial competitiveness across Southeast Asia's largest economy.

The tariff elimination slashes operational overhead for critical domestic industries facing elevated global supply chain costs and raw material inflation.

By reducing import duties to zero for aircraft parts and maintenance equipment, Indonesia aims to position its domestic MRO sector as a cost-effective regional hub competing against established aviation hubs in Singapore and Malaysia.

Simultaneously, temporary tariff relief for LPG feedstock lowers input costs for petrochemical manufacturers, creating a positive cost-efficiency cascade across downstream manufacturing sectors that rely on processed chemical inputs.

Unpacking PMK 50/2026 and Fiscal Execution

The strategic policy executes executive directives from President Prabowo Subianto to safeguard the real economy and maintain industrial output momentum.

"With lower cost burdens, business players are expected to maintain their operational continuity, increase efficiency, and retain strong competitiveness," Coordinating Ministry for Economic Affairs Spokesperson Haryo Limanseto stated in an official release on Saturday, July 25, 2026.

PMK No. 50/2026 amends previous tariff structures, taking effect seven days post-promulgation.

For the petrochemical industry, the 0% duty specifically targets imported LPG under tariff headings 9845.10.00 and 9845.20.00 for a temporary six-month window.

Operational guidelines for aviation MRO service providers are governed under Industry Minister Regulation No. 16/2026, while qualifying petrochemical recipients are defined under Industry Minister Decree No. 1944/2026.

"This policy is part of the government's efforts to maintain economic growth momentum by strengthening the real sector," Limanseto added during the announcement. "Through production cost efficiency, industrial players will have greater leeway to invest, expand capacity, and strengthen competitiveness."