Terra Drone’s G20 Agricultural Drone Earns Indonesia Local Content Certification, Opening Government Contract Access

Terra Drone Indonesia has secured a strategic advantage in the world’s largest palm oil market by obtaining local content certification for its G20 agricultural spray drone. The certification from Indonesia’s Ministry of Industry opens doors to lucrative government contracts in a country that produces 60% of the world’s palm oil.

The Japan-based drone service provider achieved 31.26% Indonesian component content in its G20 model, exceeding the 30% threshold required for drone certification under the country’s TKDN (Tingkat Komponen Dalam Negeri) system. The certification evaluates the proportion of locally sourced materials, components, and labor used in manufacturing.

TKDN Certification Unlocks Government Procurement Access

Indonesia’s domestic content certification system serves as both an industrial development policy and a market access gatekeeper. Companies with TKDN certification gain priority access to government and state-owned enterprise projects, along with tax incentives and reduced import duties.

For Terra Drone, the certification means faster maintenance turnaround through local parts procurement and eligibility to bid on agricultural modernization contracts funded by Indonesian government agencies. The company plans to increase the G20’s local content ratio to 50% to further strengthen its competitive position.

G20 Drone Designed for Indonesia’s Palm Plantation Terrain

The G20 agricultural drone features a 20 kg (44 lb) payload capacity and 20 L (5.3 gallon) tank for pesticide and fertilizer spraying across Indonesia’s vast palm plantations. The drone incorporates automatic route generation, obstacle avoidance, and terrain-following flight modes designed to handle the country’s challenging topography of hills, slopes, and terraced landscapes.

Terra Drone Indonesia has deployed more than 150 agricultural drones across Southeast Asia, conducting flights over 200,000 hectares (494,000 acres) with up to 4,000 flights per day. The company reports achieving up to 30% cost reductions for palm plantation clients through precision spraying that minimizes chemical waste.

Local Content Requirements Reshape Drone Market Access

Terra Drone faces competition from Indonesian manufacturers already meeting higher local content thresholds. Frogs Indonesia recently received TKDN certification for its Sekar Agri drone spreader with 41.98% domestic content, giving the local company an edge in government procurement scoring.

The TKDN system reflects a broader trend of countries implementing local manufacturing requirements for drone suppliers. Indonesia joins other nations creating regulatory frameworks that favor domestically produced or assembled unmanned aircraft systems over pure imports.

Terra Drone Indonesia plans to expand TKDN certification to additional agricultural drone models in its lineup, building on its established presence in palm oil plantation spraying services across Indonesia and Malaysia.

DroneXL’s Take

Indonesia’s local content certification system represents more than just one company’s market access strategy—it signals a fundamental shift in how major agricultural markets will regulate commercial drone procurement. The TKDN requirement creates a two-tier market where foreign manufacturers must invest in local assembly and sourcing to compete for government contracts, while domestic producers enjoy built-in advantages.

For drone manufacturers eyeing Southeast Asia’s booming agricultural sector, Terra Drone‘s certification path offers a blueprint. The company balanced its Japanese engineering expertise with Indonesian component sourcing to clear the 30% threshold. But with local competitor Frogs Indonesia already at 42% domestic content, the bar keeps rising.

The bigger question: Will other palm oil producing nations follow Indonesia’s lead? Malaysia already accounts for significant portions of global palm oil production alongside Indonesia. If similar local content requirements spread across ASEAN countries, drone manufacturers may need to establish regional assembly operations rather than relying on centralized manufacturing in China, Japan, or the United States.

This matters for U.S. drone operators too. As DJI faces mounting restrictions in Western markets due to data security concerns, and now Asian markets demand local manufacturing, the commercial drone industry faces a fragmentation that could reshape supply chains, pricing, and product availability globally.

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