Indian Investment in Indonesia: What Industries Are Indian Companies Entering?

Indian investment in Indonesia refers here to investment that Indonesian authorities record with India as the source country. From 2023 to 2025, the figures show activity across thousands of project records and a wider sector mix than mining, infrastructure, and large conglomerate projects alone.

How Much Indian Investment Entered Indonesia From 2023 to 2025?

Indian investment in Indonesia reached US$275.38 million in 2023, US$173.1 million in 2024, and US$237.6 million in 2025, according to the Embassy of India’s Economic and Commercial Brief.

The same Embassy brief records US$46.37 million for Q1 2026 and US$1.73 billion of Indian investment from 2010 through Q1 2026. It does not publish a project count for Q1 2026.

These are source country statistics. They may not capture every investment linked to an Indian parent when capital enters Indonesia through a holding company in another jurisdiction.

Indonesian investment realization data is also an administrative dataset with a defined scope. It should not be read as a complete measure of every cross border capital flow connected with India.

What Does Project Frequency Show That FDI Value Alone Does Not?

Project frequency adds an activity measure to Indian investment in Indonesia, but it does not identify the number of unique investors. One company can generate more than one project record across activities, locations, or reporting periods.

That distinction changes how the 2024 figures should be read. Recorded investment value fell from 2023, while the number of recorded project entries rose from 1,457 to 3,412.

The data does not prove that thousands of new Indian companies entered Indonesia. It does show that a value only ranking leaves out part of the administrative record of Indian investment activity.

For an Indian founder, that is a more useful starting point than assuming the market belongs only to conglomerates. The next test is company specific: customer demand, KBLI classification, ownership, licences, imports, staffing, and location.

Which Industries Are Indian Companies Entering in Indonesia?

Indian companies in Indonesia operate across established industries and newer investment areas. The Embassy of India’s May 2026 brief says more than 130 Indian companies have invested in the country.

Readers looking for individual corporate profiles can use our separate guide to Indian companies already operating in Indonesia. The focus here is the sector pattern and what it means for a new entrant.

IT, Software, and Digital Services

Indian IT and software companies have an established base for commercial activity in Indonesia, while bilateral digital cooperation has expanded into Digital Public Infrastructure and AI related engagement.

The Embassy’s current economic brief names Indian technology companies with an Indonesian presence and records recent cooperation in digital development. Those cooperation initiatives should be kept separate from direct investment unless a specific investment transaction has been announced.

For a new software company, the entry question is operational. A company that needs local invoices, Indonesian commercial contracts, regulated activities, or a full operating team has different requirements from a business conducting market research or liaison work.

Potential areas to test include enterprise software, cybersecurity, cloud implementation, business process technology, financial technology infrastructure, AI services, and sector specific SaaS. Each case still needs customer and regulatory validation.

Pharmaceuticals and Healthcare

Pharmaceuticals and healthcare have produced some of the clearest recent Indian investment announcements in Indonesia.

The Embassy of India’s May 2026 Economic and Commercial Brief lists Hetero, Aurobindo, Dr. Reddy’s Laboratories, MSN Labs, and PT Tulip Diagnostics Indonesia among pharmaceutical or medical device companies that have recently invested in Indonesia.

A separate February 2025 Embassy release on President Prabowo Subianto’s State Visit to India named Hetero, MSN Labs, and Auro Gen Pharma as three recent pharmaceutical investments. The two official disclosures use different company lists, so they should not be treated as the same announcement.

New entrants can test opportunities across formulations, diagnostics, medical devices, healthcare technology, and related services. Commercial viability depends on product registration, facility licensing, manufacturing or distribution standards, and applicable BPOM or health sector requirements.

Automotive Components and Electric Mobility

Indian automotive activity in Indonesia includes established vehicle and component businesses, plus newer manufacturing commitments in parts and electric mobility.

The Embassy of India reported in February 2025 that UNO Minda had invested US$30 million in a high tech auto parts manufacturing unit. The same release reported an additional US$4 million EV manufacturing investment by TVS.

Royal Enfield was reported to have local manufacturing plans. That wording matters because a plan should not be presented as a completed manufacturing investment without a later confirmation.

Illustrative supplier opportunities include electrical components, tooling, electronics, aftermarket products, engineering support, EV components, and industrial services. Demand from actual customers should determine whether local manufacturing makes sense.

Industrial Manufacturing and Engineering

Indian business in Indonesia has a long presence in steel, engineering, power equipment, infrastructure, machinery, chemicals, and industrial products.

A new manufacturer does not need to copy the scale of an established industrial group. Component makers, equipment vendors, process technology businesses, maintenance providers, and specialized manufacturers can assess demand within existing industrial clusters.

Location plays a direct role in the economics. Proximity to customers, industrial estates, ports, utilities, suppliers, and labor can affect the choice between importing, assembling, and manufacturing in Indonesia.

Textiles and Textile Machinery

Indian companies have participated in Indonesia’s textile sector through yarn, fibers, garments, manufacturing, machinery, and trading activities.

The opportunity differs by business model. A fabric or garment producer must assess production economics and facility requirements. A machinery supplier may need sales coverage, technical support, spare parts, imports, and a distributor before local production makes sense.

This distinction is useful for Indian SMEs. Sector presence does not mean every entrant needs the same capital commitment or legal structure.

Trading and Distribution

Trading and distribution can suit Indian manufacturers that want Indonesian customers without building a factory at the first stage.

Indonesia’s current general import framework is set out in Minister of Trade Regulation No. 16 of 2025, amended by Regulation No. 37 of 2025 and Regulation No. 18 of 2026.

Importers use an NIB that functions as an API. API U or API P treatment and additional approvals depend on the importer’s role and the goods involved.

Commodity rules can add Import Approvals, Surveyor Reports, technical standards, labeling, BPOM requirements, or other product approvals. Our guide to Indonesia import licensing requirements covers the API framework in more detail.

Consumer Products and Retail

Indian consumer businesses also have an Indonesian footprint, although company examples should not be treated as proof that every consumer category has the same market potential.

The Embassy’s current economic brief lists Godrej among prominent Indian companies in Indonesia. PT Lulu Group Retail appears separately in the Embassy’s Local Entrepreneurs Directory.

A mid market brand can test Indonesia through an importer or distributor before taking control of local sales through its own entity. The tradeoff is control over customer relationships, pricing, channel data, registrations, and future distributor transition.

Marine Biotechnology and Other Specialized Fields

Recent Indian activity also reaches specialized sectors outside the traditional investment categories.

The Embassy reported that Sea6 Energy invested in a seaweed project in Lombok. Separate bilateral initiatives cover AI, digital development, healthcare cooperation, and Digital Public Infrastructure.

Those cooperation programs can support future business activity, but they should not be counted as FDI unless an investment transaction has been disclosed.

Which Entry Cases Are Practical for Indian SMEs and Mid Market Companies?

Indian SMEs and mid market companies may find lower commitment entry cases where an existing product, technology, or supplier capability already matches Indonesian demand. The table below is illustrative, not a sector ranking.

Some viable opportunities do not require greenfield manufacturing at the first entry stage. A supplier can follow customers, a software company can establish local sales, and a consumer brand can use distribution while it tests demand.

That sequencing can reduce upfront organizational and capital commitments. It does not remove the need to plan ownership, contracts, licences, tax, and the path from partner led entry to direct operations.

Can Indian Investors Own 100 Percent of an Indonesian Company?

Indian investors can hold 100 percent of a PT PMA in many business fields, but the answer depends on the business activity and the conditions attached to its KBLI classification.

Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021, opens commercial business fields to investment except fields closed to investment or activities that only the Central Government may conduct.

The framework also identifies priority fields, activities allocated to or requiring partnership with cooperatives and MSMEs, and activities subject to investment conditions.

The investment business field framework reviewed for this article does not create an India specific foreign ownership category. The KBLI, sector rules, and applicable investment conditions determine the ownership position.

Our separate guide to foreign ownership rules in Indonesia covers this question in more detail.

Which Licensing and Import Rules Apply to New Indian Businesses?

Indian businesses entering Indonesia must follow the risk based licensing framework under Government Regulation No. 28 of 2025, with OSS used for integrated business licensing.

Government Regulation No. 28 of 2025 took effect on June 5, 2025 and revoked Government Regulation No. 5 of 2021. It links the licensing requirements to the risk assessment for each business activity.

Minister of Investment and Downstream Industry and Head of BKPM Regulation No. 5 of 2025 provides the current implementation procedures for risk based licensing and investment facilities through OSS. It took effect in October 2025 and revoked BKPM Regulations No. 3, No. 4, and No. 5 of 2021.

Importing adds another regulatory layer. Minister of Trade Regulation No. 16 of 2025 now needs to be read with its 2025 and 2026 amendments. Product specific rules can add approvals beyond the NIB and API.

An Indian company should therefore map its planned activity before incorporation. The KBLI can affect ownership, licensing, location, imports, product approvals, and the operating model entered into OSS.

Should an Indian Company Use a PT PMA, Representative Office, or Distributor?

An Indian company should choose its Indonesia entry route based on what it needs to do in the market. Revenue, invoicing, commercial contracts, imports, staff, and control over customers are the main dividing points.

PT PMA for Direct Commercial Operations

A PT PMA is the structure to assess when the Indonesian operation needs to issue local invoices, sign commercial contracts, trade, manufacture, employ an operating team, or conduct other permitted revenue generating activities.

The incorporation process has its own search intent, so this article does not repeat it. See our guide to company registration options in Indonesia for the registration process.

Representative Office for a Limited Local Presence

A representative office can fit a foreign company that needs a permitted local presence without an ordinary Indonesian revenue generating subsidiary.

Indonesia has more than one representative office category, and the permitted scope differs by office type. A general KPPA should not be used as an ordinary local sales company.

Companies still comparing these structures can review the PT PMA and representative office comparison and the representative office setup service.

Distributor for Partner Led Market Validation

A distributor can fit an Indian manufacturer or brand that wants to test customer demand before building its own commercial organisation in Indonesia.

The arrangement transfers part of the market execution to the local partner. Distribution contracts should address territory, exclusivity, registrations, intellectual property, customer ownership, performance obligations, and termination rights.

If your Indonesian plan has moved beyond market testing and now requires local invoicing, commercial contracts, licensed operations, or direct control of the team, a PT PMA becomes one of the main structures to assess. InvestinAsia’s PT PMA registration service can coordinate incorporation and OSS licensing around the planned business activities.

What Happens If the Entry Structure or Licence Does Not Match the Business?

A mismatch between the registered structure and the actual Indonesian activity can delay operations, require corporate or licensing amendments, create customs problems, or expose the company to regulatory sanctions.

A general representative office, for example, cannot be treated as an ordinary local revenue generating company. A business that needs local commercial operations should assess an entity authorised for those activities.

Importers face a separate risk. An NIB with an API function does not replace every commodity specific approval. Missing an Import Approval, product registration, standard, or other requirement can stop goods from clearing the applicable process.

The same principle applies to sector licences. Registering an entity first and discovering the wrong KBLI or activity scope later can force amendments before the company can operate as intended.

What Should Indian Companies Check Before Entering Indonesia?

Indian companies should test commercial feasibility and regulatory feasibility together. Incorporation should follow a clear view of customers, activities, licences, capital, and the route to market.

1. Define the revenue model. Identify who will sell, invoice, sign contracts, import, manufacture, and provide services in Indonesia.
2. Map the activities to KBLI codes. Check the actual operating scope rather than choosing a code from a broad English description.
3. Check ownership conditions. Review the investment business field rules and any sector requirements attached to each activity.
4. Map business and product licences. Include OSS requirements, import approvals, BPOM registration, standards, and other sector permits where relevant.
5. Choose the entry route. Compare direct PT PMA operations with a representative office or distributor based on what the company needs to do.
6. Model tax and cross border payments. Review corporate tax, VAT, withholding, transfer pricing, royalties, service fees, and treaty treatment. Our guide to PT PMA tax obligations covers the company level tax framework.
7. Plan foreign staffing. Identify which founders or employees will work in Indonesia and review the relevant Indonesia work visa requirements.
8. Test the location and operating cost. Manufacturing, warehousing, offices, industrial estates, logistics, and customer proximity can change the economics of direct entry.

Founder led companies can use this process to separate what must exist at launch from what can wait until demand has been validated.

What Does the 2023 to 2026 Pattern Suggest for Indian Founders?

The 2023 to 2026 evidence suggests that Indian business activity in Indonesia spans more sectors and project records than a headline FDI ranking shows, while the available data does not prove how many unique new investors sit behind those records.

The established footprint includes infrastructure, resources, textiles, steel, consumer goods, banking, automotive, and technology. Newer official disclosures add pharmaceuticals, diagnostics, healthcare, auto components, EV manufacturing, and marine biotechnology.

AI, digital development, and Digital Public Infrastructure belong in a separate category of bilateral cooperation unless a specific investment transaction has been disclosed.

For an Indian founder comparing Indonesia with other ASEAN markets, the decision starts with a narrower question: can your company serve Indonesian customers under a viable ownership, licensing, tax, staffing, and distribution model?

A company that can answer those questions has a better basis for deciding whether to test demand through a partner or establish a direct Indonesian operation.