Special report｜Indonesia's Vape Industry Has 200 Manufacturers and $1.7 Billion in Investment. Could a Regulatory Divide Derail Its Rise as the World's No. 2 Manufacturing Hub After Shenzhen?
Indonesia's vape industry has 200 manufacturers and $1.7 billion in investment, but a regulatory dispute could hinder its rise as a global manufacturing hub.Summary
Indonesia's Ministry of Industry reports approximately 200 e-cigarette companies, Rp31 trillion ($1.71 billion) in cumulative investment, about 100,000 jobs, and $518 million in 2025 exports, with excise revenue of Rp2.84 trillion (~$157 million). Chinese manufacturers including Smoore, GEEKVAPE, and Jinjia Group have established Indonesian operations, and logistics specialists report increased equipment shipments and production from late 2025 into 2026. However, the National Narcotics Agency (BNN) advocates a comprehensive ban on vape use and circulation after detecting controlled drugs and psychoactive substances in some e-liquid samples, while the industry ministry favors tighter controls on manufacturing, raw-material imports, and distribution rather than a full prohibition. No final nationwide ban has been adopted. The regulatory uncertainty could affect Indonesia's potential to become a major global manufacturing center after Shenzhen, especially as China tightens domestic licensing, enforcement, and export VAT rebates.
(Source：2Firsts)
