Industry Minister Targets Rp 852.9 Trillion Manufacturing Investment in 2026

JAKARTA, Investortrust.id — Industry Minister Agus Gumiwang Kartasasmita targets Rp 852.9 trillion, equal to $53.4 billion, in manufacturing investment in 2026 in Jakarta on Monday, Jan 26, 2026 as the government pushes industrial expansion, stronger supply chains, and higher value added growth, a move expected to reinforce manufacturing as a key economic driver. The target is accompanied by a 5.51 percent growth goal for the non oil and gas manufacturing sector and a higher contribution to national output.

The investment target for 2026 exceeded the realization of non oil and gas manufacturing investment through the third quarter of 2025, which reached Rp 552 trillion or 38.49 percent of total realized investment of Rp 1,434 trillion. The Industry Ministry said the higher target reflected confidence in the sector’s resilience despite global economic uncertainty.

“In 2026, development targets are also directed toward increasing investment in the industrial sector to Rp 852.9 trillion,” Agus said during a working meeting with the House of Representatives Commission VII in Jakarta.

Beyond investment, the ministry set a target for manufacturing’s contribution to gross domestic product at 18.56 percent in 2026. Manufacturing was also expected to account for 74.85 percent of total national exports, underscoring its role as Indonesia’s main export engine.

From the labor side, the manufacturing sector was expected to absorb 14.68 percent of the national workforce. Labor productivity was targeted to reach Rp 126.20 million per worker per year as industrial upgrading continued.

The government also aimed to increase the contribution of manufacturing outside Java to 33.25 percent. At the same time, emissions from priority industrial sectors were targeted to decline by 6.79 million tons of carbon dioxide equivalent.

These targets build on recent performance, as non oil and gas manufacturing contributed 17.39 percent to gross domestic product through the third quarter of 2025, equal to Rp 1,053.56 trillion in current prices. In constant prices, the sector’s contribution stood at around 18.70 percent, or Rp 644.17 trillion.

Manufacturing growth also surpassed overall economic growth for the first time in 14 years in the third quarter of 2025. The non oil and gas manufacturing sector grew 5.58 percent, higher than national economic growth of 5.04 percent.

“This is the first time in the last 14 years that manufacturing growth has been higher than national economic growth, and this is how it should be,” Agus said.

He stressed that manufacturing should lead economic expansion rather than follow it. “What we have always pursued is that manufacturing growth should pull overall economic growth, not the other way around where economic growth pulls manufacturing,” he said.

Agus said cumulative manufacturing exports from January to November 2025 reached $205.93 billion, accounting for 80.27 percent of Indonesia’s total exports. The figure highlighted manufacturing’s strategic role in sustaining external trade performance.

The minister also linked Indonesia’s industrial strategy to messages delivered by President Prabowo Subianto at the World Economic Forum Annual Meeting 2026 in Davos, Switzerland. He said the president emphasized stability, credibility, and long term partnerships as Indonesia positioned itself within global supply chains.

According to Agus, the government was prioritizing quality investment that delivered technology transfer, knowledge sharing, and concrete involvement of domestic industrial players, including small and medium industries. He said Indonesia rejected investment models that operated in isolation from the local economy.

“The investment we are pushing is investment that brings know how, technology, and real involvement of local industrial players,” Agus said. “Indonesia does not want investment that is enclave in nature, but investment that is closely connected to the domestic industrial ecosystem and provides opportunities for Indonesian products to enter global supply chains.”

He highlighted the role of Danantara Indonesia as a strategic instrument to accelerate industrialization and attract long term partnerships with global investors. The sovereign wealth fund was designed to support value added industries rather than purely financial inflows.

“Danantara is the foundation of Indonesia’s partnership with global investors,” Agus said.