The Indonesian government's free nutritious meal program is reportedly benefiting the Chinese manufacturing industry as most of the dining utensils are imported from China, according to a local business source.

An Indonesian businessman said that local manufacturers struggle to compete due to the significantly lower prices of Chinese-made products. 

“The production costs in China are much lower, and they can afford to export at a price point that we cannot match. As a result, most of the lunch program’s procurement is being fulfilled by Chinese suppliers,” the businessman, who asked to remain anonymous, spoke to Indonesia Business Post on Tuesday, March 18, 2025. 

Based on his findings, Chinese manufacturers in Guangdong Province’s Chao Shan region have reportedly fully booked their production capacity, with an estimated 40 million stainless steel plates set to flood the Indonesian market this year.

He warned that this procurement strategy could have long-term impacts on Indonesia’s manufacturing sector. 

“If we continue relying on imported goods, domestic industries will struggle to grow, and we could become overly dependent on foreign manufacturers,” he said.

Indonesia is one of the world’s largest producers and exporters of nickel and its downstream industry, particularly SS 304 material plats, with major processing hubs in Surabaya and Jakarta. However, despite having a strong supply chain supported by nickel production in Morowali and Kendari, local manufacturers are struggling due to increasing imports from China. Many local punch and hydraulic press factories are facing operational slowdowns due to a lack of orders.

He alleges that many of these imports enter Indonesia through illicit channels, bypassing customs duties, excise taxes, and VAT. With an estimated 10 percent import duty and 11 percent VAT not being collected, the Indonesian government is potentially losing significant revenue. Additionally, transactions for these imported plates are often conducted in cash without invoices, making tax enforcement even more challenging.

The businessman asks policymakers to consider strategies that would support Indonesian manufacturers, such as tax incentives or local content requirements. 

“We need policies that empower our own industries rather than giving business opportunities to foreign manufacturers,”he said.

National Nutrition Agency (BGN) head Dadan Hindayana said those Chinese made  utensils had been available in Indonesia and were regular trade goods before the Free Lunch Program began. Since February 2024, he had been asking domestic industries to produce such items. 

“For food trays, domestic production is starting to increase, and we are confident that it will be able to meet long-term demand. Meanwhile, most other utensils are generally produced locally,” Dadan said. 

As the free nutritious meal program expands, stakeholders continue to debate the balance between cost efficiency and national economic interests.