Healthcare to Indonesia

Trends and opportunities

The market

There has been sharp growth in the number of private hospital developments across Indonesia, particularly in the most heavily populated provinces of Java and Sumatra. According to a 2019 data from the Indonesian Health Ministry, in total there are 2,813 hospitals in Indonesia, consisting of 1,026 public hospials and 1,787 private hospitals (Source: Katadata, List of Hospital Ownership in Indonesia, October 2019. Indonesian language only). Ramsay Health Care has established their international footprint with three hospital chains in this market.

Although the economy is growing at a steady pace across the archipelago, there is an unequal distribution of health care services between urban and rural areas. To cater to the rising demand for healthcare services, better access to hospital services for the poor and rural population, some private and public hospitals are looking to increase their bed capacity via the expansion of existing facilities or construction of new hospitals and primary care. Another challenge for the private hospital sector in Indonesia is the limited availability of qualified healthcare professionals, thereby causing Indonesians to seek treatment overseas. A 2018 report published by consulting firm Oliver Wyman highlighted revenue loss of about US$48 billion a year from outbound medical tourism. (Source: Oliver Wyman, The Future of the Indonesian Healthcare Ecosystem, The Outlook to 2030. Fee based access. Accessed August 2020)

In 2014, the Indonesian Government introduced a new Universal Social Security System (BPJS). A significant percentage of the Indonesian population find medications unaffordable at present. As of 2019, only 83% or 224 million Indonesians already covered by the program. BPJS has suffered from deficit due to increasing medical costs and the Government has responded by increasing the premium to cover for the deficit.

With the middle-class population forecast to increase to 135 million by 2030, coupled with greater awareness of the importance of maintaining a healthier lifestyle, the number of elderly people in Indonesia is expected to increase to 36 million by 2030. Most elderly homes in Indonesia provide social services, but with a very limited capability to provide comprehensive nursing care. Find out more at the Austrade’s Aged care to Indonesia market profile.


  • Health care services training: Capacity building opportunities exist across the board in the vocational training of doctors, nurses and hospital workers in all specialty medical areas, hospital administration, patient management and after-care.
  • Diagnostic devices technology: The medical devices technology market in Indonesia is forecast to pass US$ 1.9 billion by 2024. (Source: Fitch Solutions, Indonesia Medical Devices Report Q3 2020. Fee based access. Accessed August 2020). Data from the Indonesian Health Ministry medical device registration database shows that 90% of medical devices in Indonesia are imported. Business opportunities primarily exist in surgical equipment, high-intensity focused ultrasound, radio immunotherapy and clinical laboratory equipment used for diagnostic tests, particularly for molecular diagnostics, microbiology, and immunochemistry testing and genetics testing.
  • Health solutions: The healthcare ecosystem in Indonesia is complex and often fragmented. As an emerging market with a relative lack of public service delivery infrastructure and a challenging geography, the healthcare IT opportunity in this market will be a major contributor to growth over the medium to long term. Examples of key growth areas are telehealth, telemedicine, electronic medical records, and the use of healthcare mobile applications for point-of-care diagnostics, particularly in remote and rural areas.
  • Seniors living homes with high level facilities and management services: There are a number of major developers who are operating in the field of healthcare service but limited expertise in the aged care.

Competitive environment

Some foreign medical device companies have set up manufacturing facilities in Indonesia. (Source: Frost & Sullivan. Fee based access. Accessed August 2020) JMS, a Japanese company is a major supplier of medical disposables and haemodialysis equipments and it has set up its manufacturing site in Batam Island,  while Paramount, another Japanese company is a major manufacturer of hospital beds in Bekasi.

Some technology players have begun to develop information technology solutions for improving health services in Indonesia. In digital health, telemedicine is a growing sector, with tech startups such as Halodoc and Alodokter leading the fray by offering medical services accessible on mobile application. Halodoc obtain US$65 million from its series B fundraising while Alodokter raised US$ 33 million, both startups tout million of active users.  These applications  offer a full range of services: online consultation, medicine delivery, on-demand lab tests, a hospital and doctor directory, and a doctor appointment.

Tariffs, regulations and customs

Regulatory developments

To establish a foreign investment hospital, the foreign investor and its Indonesian partner must secure a recommendation from the Indonesian Investment Coordinating Board (BKPM). After securing those recommendations, the parties can apply for a hospital license from the Minister of Health. The maximum limit for foreign ownership has been increased to 67 per cent, and foreign companies are allowed to invest in any location throughout the country.

All healthcare supplies and equipment must be registered with the Ministry of Health of the Republic Indonesia, Directorate General of Pharmaceutical Services & Medical Devices, and Directorate of Medical Device Production and Distribution Development. The import duties of up to 10 per cent apply to medical equipment. In general, medical supplies and plastics have a tariff rate of 20-30 per cent. All imported medical equipment is subject to a 10 per cent Value Added Tax. For more information, visit tariffs and regulations.

Indonesian food supplement registration is regulated by the National Agency of Drug and Food Control (BPOM). Foreign companies should occupy their own production plant or partner with a local company.

Distribution channels

Having a local partner is a mandatory as a key to market entry in Indonesia. A foreign company is not allowed to register any form of healthcare business in Indonesia without either a local Indonesian office or a local distributor.

Foreign medical device and food supplement companies in long term partnerships should seek to expand their market penetration via a local manufacturing. These will support a presence in the competition and sales effectiveness with a low-cost of workforce. Australian Company Blackmores, has set up a JV with Kalbe Farma to start selling vitamins and premium supplements in Indonesia. (Source: Kalbe, Kalbe and Blackmores Engaged in Business Development for Healthy Supplement Products, November 2015)

Marketing your products and services

Market entry

  • Culture adoption - understand the local business characteristics, need to think realistic, long term and flexible on business models.
  • The market is very price sensitive, be prepared on what price point is acceptable in the market, especially with intense competition with Germany, Japan and US as the leaders in healthcare market.

Links and industry contacts

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