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    • DOI: 10.18178/JOEBM
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HOME > Archive > 2026 > Volume 14 Number 1 (2026) >
JOEBM 2026 Vol.14(1): 15-20
DOI: 10.18178/joebm.2026.14.1.903

How the US Inflation Reduction Act Transforms Indonesia’s Nickel Industry

Santa Laetitia Nusa Putri 1,2, Daffa Kaditya Tayip 1,2, Kaihua Xu 1,2, Nila Armelia Windasari 3, and Leiting Shen 1
1. School of Metallurgy and Environment, Central South University, Changsha 410083, China
2. Jingmen GEM New Materials Co., Ltd., Jingmen 448000, China
3. School of Business and Management, Institut Teknologi Bandung, Bandung 40132, Indonesia
Email: 233519009@csu.edu.cn (D.K.T.)
*Corresponding author

Manuscript received November 5, 2025; accepted January 2, 2026; published January 30, 2026.

Abstract—Indonesia holds over 42% of the world’s nickel reserves and has rapidly become a global production leader. However, the country faces major challenges under the United States’ Inflation Reduction Act (IRA), which restricts tax incentives to minerals sourced from non-Free Trade Agreement (FTA) partners. Without such agreement, Indonesian nickel exports are largely excluded from premium markets. This study employs a mixed-method approach, combining stakeholder interviews with quantitative scenario modeling, to assess Indonesia’s potential to access IRA-compliant markets. The simulation projects that without reform, compliant exports may remain below USD 500 million annually by 2030. In contrast, coordinated national policy could unlock up to USD 11.4 billion in annual exports, totaling USD 35.6 billion by decade’s end. The qualitative approach highlights the disconnection between firm-level adaptation and national readiness to realize said number. The novelty of this study lies in bridging between these two, revealing that coordinated intervention is critical for Indonesia to transition from volume-driven to value-driven exports in global supply chains.

Keywords—inflation reduction act, Nickel industry, policy scenario, market simulation

Cite: Santa Laetitia Nusa Putri, Daffa Kaditya Tayip, Kaihua Xu, Nila Armelia Windasari, and Leiting Shen, "How the US Inflation Reduction Act Transforms Indonesia’s Nickel Industry," Journal of Economics, Business and Management, vol. 14, no. 1, pp. 15-20, 2026.

Copyright © 2026 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

 

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