Jakarta — Indonesia’s furniture industry is seeking government support to boost exports and counter increasing domestic competition, with a potential $6 billion target in sight. The Indonesian Chamber of Commerce and Industry (Kadin) met with Finance Minister Purbaya Yudhi Sadewa on Friday, December 19, 2025, to discuss potential deregulation and incentives.
Furniture Firms Seek Funding to Expand Global Reach
Indonesia aims to significantly increase its share of the $300 billion global furniture market.
- Indonesia currently holds a modest $2.5 billion share of the global furniture market.
- A key challenge is a decreasing trade surplus due to rising furniture imports.
- Access to competitively priced financing is a top priority for industry players.
- Indonesia controls roughly 85 percent of the world’s rattan supply.
- Diversifying export markets beyond the U.S. is crucial for sustained growth.
What’s holding back Indonesia’s furniture industry? Despite healthy growth, the nation’s furniture trade surplus is shrinking as imports rise, according to Anindya Novyan Bakrie, Chair of Kadin. “The growth of the furniture industry is actually quite healthy,” Bakrie said after the meeting at the Ministry of Finance office. “However, the challenge is that the trade surplus is decreasing due to the increasing imports to the domestic market.”
Financing and Rattan: Key Areas for Support
One proposed solution is increased access to funding with lower interest rates. Discussions also centered on leveraging Indonesia’s abundant natural resources, particularly rattan, for industrial development. Indonesia boasts 85 percent of the world’s rattan reserves, presenting a significant opportunity for value-added production.
Ahmad Sobur, Chair of the Indonesian Furniture and Handicraft Industry Association (HIMKI), emphasized the need for concrete government assistance, particularly in financing. Entrepreneurs can currently access loans through the Indonesian Export Financing Institution (LPEI) at around 6 percent interest. However, the available funding is limited to approximately Rp200 billion.
LPEI Funding Under Scrutiny
HIMKI is hoping for a substantial increase in LPEI funding—up to Rp16 trillion—which they believe could propel furniture exports to $6 billion. Finance Minister Purbaya Yudhi Sadewa indicated a willingness to consider expanding the LPEI financing scheme, but cautioned that a review of the institution’s internal operations is necessary.
“So we will first check if the LPEI is in order,” Sadewa stated at the Presidential Palace, Jakarta, on Friday, December 19, 2025. “If it is, we will add incentive support to the furniture industry through LPEI.” The minister’s comments allude to past issues at LPEI, including a corruption case involving credit misuse.
The government’s response will be critical in determining whether Indonesia can capitalize on its potential and secure a larger slice of the global furniture market.
