Teten Masduki, the Minister of Cooperatives and Small and Medium Enterprises (SMEs), has stated that traders can still sell imported goods under US$100 on online marketplaces. However, he emphasized that there are conditions that need to be met.

Teten explained that the condition involves local traders purchasing the imported goods through the proper import mechanisms before selling them on online marketplaces.

In other words, sellers cannot directly buy goods from abroad without going through the necessary customs procedures.

"Cross-border activities are no longer allowed. They must first bring the goods into Indonesia before selling them online," Teten stated after the KUR Award event and the distribution of KUR to SMEs held at Pos Bloc, Filateli Building, Sawah Besar, Central Jakarta on Wednesday, August 9, 2023.

Teten addressed these conditions following the plan to revise Minister of Trade Regulation (Permendag) No. 50 of 2020 concerning the Licensing Provisions for Business, Advertising, Development, and Supervision of Business Actors in Electronic Trading Systems.

Cross-border trading restrictions

In this revision, the government aims to prohibit cross-border trading for goods valued below US$100. Cross-border trading involves importing goods into a country's territory without undergoing customs inspection.

Several permits need to be obtained by traders before selling their imported goods on online marketplaces.

These include circulation permits from the Food and Drug Supervisory Agency; Indonesian National Standard (SNI) certification; and halal certification.

"They need to go through the same processes as local SME products, creating a level playing field," he explained.

An effort to protect local small-medium enterprises

According to Teten, this ban is intended to protect local SMEs. He mentioned that foreign products have flooded the Indonesian marketplace with extremely cheap prices, making it difficult for local SMEs to compete.

"Low-priced goods should ideally not enter the market. We've also developed our own products, and this is to prevent predatory pricing for cheap foreign products," he commented.

In addition to the restriction of cross-border trading, these new regulations will also govern the separation of social media from online buying and selling platforms, and prohibit marketplaces from selling self-produced items or items from affiliated companies.

The former activist from Indonesia Corruption Watch stated that the revision of Permendag 50/2020 has reached the harmonization stage and hopefully, can be enacted soon.