Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Foreign direct investment (FDI) into Indonesia - statistics & facts
As Southeast Asia’s largest economy, Indonesia has become an attractive market for foreign direct investments (FDI). The country has seen a consistent upward trend of FDI in recent years, with net inflows reaching over 21.6 billion U.S. dollars in 2023. Its strategic geographical location, abundant natural resources, growing middle class, and substantial labor force have made Indonesia a promising destination, especially for investors seeking growth in emerging markets. Furthermore, the significance of greenfield investments, which accounted for a notable share of the total FDI inflows, shows investor confidence in Indonesia’s potential for long-term growth.
Manufacturing, transportation and storage, as well as mining—some of the largest contributors to Indonesia’s economy—stood out as sectors receiving the most investment. In 2023, base metal manufacturing secured nearly 12 billion U.S. dollars in investments, making it the largest industry for FDI in Indonesia. Transportation, storage, and telecommunications followed with around 5.6 billion U.S. dollars, reflecting the growing infrastructure across the country. The chemicals and pharmaceuticals manufacturing industry ranked third, closely followed by mining, which remains a vital sector due to Indonesia’s rich mineral resources.
Leading investors and key industries
Singapore topped the list of Indonesia’s major FDI contributors, with around 15 billion U.S. dollars of realized investments in 2023. Other major investors included China, Hong Kong, and Japan, highlighting the ties and Indonesia’s strategic role within the Asia-Pacific region.Manufacturing, transportation and storage, as well as mining—some of the largest contributors to Indonesia’s economy—stood out as sectors receiving the most investment. In 2023, base metal manufacturing secured nearly 12 billion U.S. dollars in investments, making it the largest industry for FDI in Indonesia. Transportation, storage, and telecommunications followed with around 5.6 billion U.S. dollars, reflecting the growing infrastructure across the country. The chemicals and pharmaceuticals manufacturing industry ranked third, closely followed by mining, which remains a vital sector due to Indonesia’s rich mineral resources.
Outlook for continued growth
Over the years, Indonesia has made regulatory changes to attract more foreign investments, such as the 2023 enactment of the controversial Omnibus Law, which lifted many restrictions on foreign investors. Although the law has faced criticism from labor unions, the Indonesian government believes that it would encourage job creation and economic growth. Along with Indonesia’s position as one of the leading destinations of FDI in the Asia-Pacific region, this might indicate a promising outlook for sustained investment in the years to come, particularly in key sectors like manufacturing, infrastructure, and natural resources, which remain the backbone of Indonesia’s economy.
