Indonesia’s pharmaceutical exports to rise at 7.7% CAGR by 2028

Thanks to government efforts and new investment rules to boost domestic production.

Indonesia’s pharmaceutical exports are projected to grow at a five-year compound annual growth rate (CAGR) of 7.7% to reach approximately $868m (IDR14.1t) by 2028, according to BMI.

The sector’s growth is driven by efforts to bolster domestic production, such as new investment rules and government initiatives.

In 2021, the government took steps to enhance local manufacturing capacity and attract foreign investment into the market. 

In line with this, a rule passed in the same year allowed foreign investors to own up to 100% of pharmaceutical businesses, an increase from the previous limit of 85%.

“Currently Indonesia has limited pharmaceutical raw material manufacturing, companies looking to move into Indonesia can expect to benefit from government support as well as collaboration with local players,” the report said.

Meanwhile, a heavy reliance on imported raw materials continues to pose a challenge to the sector.

Currently, about 90% of the active pharmaceutical ingredients (APIs) and excipients used in local drug manufacturing are sourced from abroad, primarily from Mainland China and India. 

This dependency exposes the industry to various risks, such as supply chain disruptions, fluctuating prices, and geopolitical tensions.

IDR1 = $0.000064