Imports Rise 34.27%: How Vulnerable Are Business Supply Chains?

National trade data are often treated like a scoreboard.

Imports rise: bad.

Imports fall: good.

For individual businesses, that interpretation is too simplistic.

A factory can import machinery because it is expanding capacity. A manufacturer can source foreign components because domestic substitutes do not exist. A distributor may hold more imported inventory because demand is increasing.

Another company may import the same type of material simply because it has never built an alternative supplier base.

Both transactions appear in import statistics.

Their risk quality is very different.

Indonesia imported US$25.91 billion of goods in June 2026, up 34.27% year on year, while exports rose 8.84% to US$25.46 billion. The country recorded a trade deficit of about US$450 million after a US$1.61 billion deficit in May.[2]

For a business leader, the useful question is not whether national imports are “too high.”

It is:

What happens to our company if the most critical imported input stops arriving?

Two months of deficits do not tell the whole story

BPS reported May exports at US$23.20 billion and imports at US$24.81 billion. Exports declined 5.73% year on year, while imports increased 22.16%.[1]

Yet Indonesia still recorded a cumulative US$4.03 billion trade surplus in January–May, supported by a US$16.31 billion non-oil and gas surplus against a US$12.28 billion oil and gas deficit.[1]

June then produced a second monthly deficit, although considerably smaller than May's.[2]

Two consecutive deficits deserve attention.

They are not enough to prove that Indonesia's entire trade structure has fundamentally changed.

And from a company perspective, even a strong national trade surplus would not guarantee supply-chain resilience.

A business can operate inside a surplus economy and still depend on one foreign component.

Imports can support productivity

In January 2026, BPS reported import increases across raw materials and intermediate goods, capital goods and consumption goods. Raw and intermediate goods were the largest driver, while capital-goods imports rose 35.23% year on year. BPS said the rise in productive-input categories reflected improving domestic production activity and real-sector investment during that period.[3]

That January composition should not be assumed to describe June.

The available primary-source breakdown for June was not sufficiently accessible during this research.

The broader lesson is simply that import dependence is not automatically weakness.

Imported machinery can lower unit costs.

Specialised components can enable products that domestic supply chains cannot yet support.

Foreign technology can accelerate automation.

That is productive dependence.

When productive dependence becomes fragile dependence

Problems begin when companies do not understand how much their operations depend on imported inputs.

Imagine a manufacturer with one inexpensive but critical component sourced from a single supplier.

The component represents only a small share of product cost.

Without it, however, the finished product cannot ship.

Its financial spend is small.

Its operational exposure is large.

That is fragile dependence.

Dependence becomes particularly vulnerable when several conditions combine: single sourcing, a single country of origin, long lead times, no qualified substitute, foreign-currency purchasing and insufficient inventory buffers.

Businesses do not need to eliminate every one of those conditions.

They need to know where they exist.

1. Imported Input Exposure

Begin with a basic question:

Which inputs would stop operations if they disappeared?

Do not rank suppliers only by procurement spend.

A low-cost component can be more critical than a high-value commodity.

Procurement and operations should consider at least two dimensions:

spend and criticality.

A supplier representing a small purchase value but offering no viable alternative can still be a high-risk node.

2. Supplier Concentration

Supplier diversification sounds simple until a company has to execute it.

An alternative supplier may exist but remain unqualified.

Specifications may differ.

Machinery may require recalibration.

Customers may need to approve the replacement material.

Certification may be required.

The real question is therefore not:

“Do we have another supplier?”

It is:

“How long would it take until that supplier could actually be used?”

An alternative that requires months of qualification is not an emergency backup for next week's disruption.

3. FX Exposure

A company can earn nearly all revenue in rupiah while buying major inputs in US dollars, yuan, euros or another currency.

That creates a mismatch.

When currencies move, input costs can change faster than selling prices—particularly when customer contracts are fixed.

FX exposure does not always have to be eliminated.

But finance and procurement should understand which product margins are most sensitive and whether pricing mechanisms can adjust quickly enough.

4. Inventory Buffer

Lean inventory can be efficient.

Lean inventory without lead-time awareness can become fragile.

The better question is not:

“How low can inventory go?”

It is:

“What minimum buffer is appropriate for our highest-risk inputs?”

A locally sourced commodity with multiple suppliers does not need the same strategy as a single-source imported component.

Inventory buffers should reflect risk, not one universal target.

5. Substitutability

A second supplier does not always mean real substitution.

Businesses need to know whether the alternative can match the required material, specification, volume, quality and delivery performance.

Substitution can also happen at the design level.

Sometimes resilience comes not from finding another supplier for the identical component, but from redesigning a product so that more alternatives become viable.

That requires procurement, engineering, product and operations to work together.

6. Cash-Conversion Exposure

Supply disruption is not only an operational problem.

It can quickly become a working-capital problem.

Longer lead times may force earlier purchasing.

Inventory rises.

Cash remains tied up for longer.

Suppliers may request payment before shipment.

Customers may still pay only after completed delivery.

A profitable business can therefore experience liquidity pressure.

Supply-chain stress testing should be connected to cash-flow forecasting.

Procurement cannot manage resilience alone.

Finance belongs in the same conversation.

Manufacturing is still expanding

Bank Indonesia's PMI-BI remained in expansionary territory at 51.43 in Q2 2026. Production, finished-goods inventory and order volumes were all in expansion territory. BI's Business Survey also showed capacity utilisation increasing to 73.80% from 73.33% in Q1.[4][5]

The context matters.

Import growth is occurring while manufacturing and broader business activity continue to show expansion signals.

That does not prove imports caused manufacturing growth.

It means companies can be expanding and becoming more exposed at the same time.

Higher production increases the cost of failure when critical inputs stop.

Input-price pressure has not disappeared

BPS reported a 6.51% year-on-year change in Indonesia's National Wholesale Price Index in June, while construction-material wholesale prices changed 8.68%. Commodities contributing to the latter included asphalt, reinforcing steel, crushed stone, sand and cement.[6]

This does not establish that higher imports caused those price movements.

For businesses, however, it illustrates why resilience is not only about availability.

Price is also part of supply risk.

A supplier may continue delivering while rising input costs put substantial pressure on margins.

Stress-test before disruption

Companies do not have to wait for a supplier failure to learn the consequences.

Run simple scenarios:

If a major shipment is delayed, when does production become affected?

If the primary supplier stops, who is the first viable alternative?

If the currency moves sharply, which product margins are most exposed?

If inventory buffers need to increase, what happens to working capital?

If customers must approve a substitute material, how long could that process take?

The objective is not perfect crisis prediction.

It is to identify where the business breaks first.

Local does not automatically mean risk-free

Supply-chain resilience does not mean everything has to be sourced domestically.

Local suppliers can also face capacity constraints, raw-material dependence, energy exposure, logistics disruption, weather events or financial stress.

Localisation may reduce some risks while creating others.

The goal is not a risk-free supply chain.

That does not exist.

The goal is a supply chain that is understood, diversified where necessary and recoverable when disrupted.

Resilience means understanding dependency

A 34.27% increase in imports is a national economic headline.

For procurement managers, CFOs and operations leaders, it should be a trigger to look inward.

Not to ask whether Indonesia imports too much.

But to ask:

Which inputs cannot be replaced?

Which suppliers are too dominant?

Which currency exposures remain invisible?

Which inventory buffers are too thin?

And how long can the business continue operating if one critical node stops?

Imports can increase productivity.

They can also create dependency.

A resilient company is not one that avoids every dependency.

It is one that knows which dependencies are critical—and has options before those options become urgently necessary.