Indonesia's $1.5 Billion Tata-Mahindra Import Deal Faces Opposition

Indonesia's plan to import 105,000 vehicles from Tata Motors and Mahindra has run into strong opposition from domestic industry bodies. The $1.5 billion deal is intended for the country's rural cooperative programme. But local manufacturers and lawmakers are demanding cancellation.

Deal Details: 105,000 Vehicles from Tata and Mahindra

State-owned enterprise Agrinas Pangan Nusantara signed deals with both Indian automakers. Mahindra will supply 35,000 Scorpio Pik Up vehicles. Tata Motors will provide 35,000 Yodha pickups and 35,000 Ultra T.7 trucks. Deliveries were planned in phases throughout 2026 .

Domestic Industry Calls for Cancellation

The Indonesian Chamber of Commerce and Industry has urged President Prabowo Subianto to scrap the plan. Vice Chairman Saleh Husin warned that importing fully built-up vehicles risks undermining the domestic automotive ecosystem . He said importing CBU vehicles "is the same as killing a growing national industry" .

Local Manufacturers Claim They Can Meet Demand

The Indonesian Automotive Industry Association stated that at least six automakers operating assembly plants in Indonesia could meet the pickup requirement given sufficient lead time . Domestic production capacity reaches hundreds of thousands of units annually with local content above 40% . Current factory utilisation remains below potential.

Lawmakers Demand Government Consistency

House of Representatives Deputy Speaker Sufmi Dasco Ahmad requested postponement until President Prabowo returns from overseas and reviews domestic industry readiness . Member of Commission IV Firman Soebagyo slammed the plan, stating that importing pickups would cut off the value chain that should benefit local industry, including steel, tyre, and glass component suppliers .

Economic Impact Concerns Raised

Industry Minister Agus Gumiwang Kartasasmita noted that fulfilling 70,000 units domestically would generate backward economic linkages of around Rp 27 trillion . Economic think-tank Celios estimated potential economic losses of Rp 39 trillion and risk to 330,000 jobs in the domestic auto industry .

Agrinas Agrees to Follow Government Direction

Agrinas President Director Joao Angelo De Sousa Mota confirmed the company will follow parliamentary and government instructions. "Whatever DPR says we follow, whatever government says we follow. We are loyal to the state and the people," he stated .

Financing Arranged Through State Banks

Finance Minister Purbaya Yudhi Sadewa explained that cooperatives will borrow from state banks, with repayment over six years using allocated village funds. He stated this will not place additional fiscal burden on the state budget .

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