Comprehensive Guide: Strategies & How to Calculate TKDN for Heavy Equipment & Mining Sector 2026

In 2026, Indonesian government regulations regarding Local Content Level (TKDN) will become even stricter, especially in priority sectors such as heavy equipment and mining. A deep understanding of TKDN calculation is no longer just an administrative compliance, but a strategic advantage to win government project tenders, obtain funding priority, and utilize fiscal incentives from programs such as the Perform-II Project.

This article is compiled to assist investors, project owners, and vendors in understanding audit mechanisms and component procurement strategies to maximize the TKDN score of your product or project.

Why Will TKDN Be Vital for Heavy Industry in 2026?

In line with the Making Indonesia 4.0 roadmap, the government encourages import substitution for strategic industrial products. For players in the mining and heavy equipment industries, having a high TKDN certification will open doors to various opportunities:

1. BUMN/Government Tender Priority: Products with TKDN + BMP (Company Benefit Weight) of more than 40% will receive significant price preference in tenders.

2. Tax Incentive Claims: Certain TKDN compliance is often a prerequisite for obtaining a Tax Holiday or green funding schemes through government risk guarantee programs.

3. Access to Green Funding: International financial institutions are now beginning to use the correlation between local regulatory compliance (including TKDN) and company ESG standards as a criterion in blended finance.

Basic Formula & TKDN Calculation Mechanism

Simply put, TKDN calculation is based on a comparison between the cost components incurred domestically (Local) and the total costs incurred (Local + Import).

Main Cost Categories:

• Goods TKDN (Unit): Focus on material and labor costs used in the unit assembly process.

• Services TKDN: Focus on the costs of local expert labor, use of local software, and rental of heavy equipment owned by local vendors.

Simple Example: If the total cost of materials and assembly for a heavy equipment unit is IDR 1 Billion, and IDR 400 Million of that is for materials from local vendors and salaries for Indonesian technicians, then the basic TKDN for materials and labor for that unit is approximately 40%.

Case Study: Calculating TKDN from the Spare Parts Network of idindustri.com

TKDN calculations are often complicated because they involve auditing the supply chain of international brands. Through the ID Industri platform, you can find specific industrial components from certified local vendors, helping to compile a credible TKDN audit trail.

Let's look at an implementation example for tools in our network (Figure 3):

• Drilling Equipment (Bit Breaker JOT PN): If a local vendor JOT PN performs final assembly or procures steel materials domestically, the use of these spare parts in your drilling project will directly increase your Service TKDN score. (Example: BIT BREAKER JOT PN 23 INCH).

• Specialist Components (Enerpac RD 93 / wago module): High-precision components such as hydraulic cylinders (like Enerpac RD 93) or automatic control modules often have low raw material TKDN. However, if the final assembly of the unit is carried out in an Indonesian assembly plant, the labor costs for that assembly are still included in the final unit TKDN calculation.

Attention: Make sure you obtain credible technical inspection reports (such as DNV 2.7-1 or DNV 2.22 standardization) to ensure that TKDN claims are supported by physical quality compliant with drilling industry standards.

Steps to Apply for TKDN Certification

To obtain an official certificate, companies must undergo an independent audit process approved by the Ministry of Industry (Kemenperin):

1. Self-Registration: Register the company through the OSS system.

2. Administrative Verification: Preparation of supporting documents (financial reports, material purchase invoices).

3. Field Audit: Visit by an independent verifier to verify the production process at the factory or project site.

4. Certificate Issuance: The TKDN certificate is issued by Kemenperin with a certain validity period.

Find Certified Local Vendor Partners

Building a successful TKDN strategy requires a transparent supply chain. Use the ID Industri directory to find verified manufacturers, ESG consultants, and spare parts providers who can help you compile a comprehensive regulatory compliance plan.