The performance of the Textile and Apparel Industry is currently in expansion and showing positive growth, supported by still-strong foreign and domestic demand. However, the Ministry of Industry has heard concerns from textile and apparel industry players about the relaxation of prohibition and/or restriction (Lartas) rules on imported goods similar to those already produced at home.
“As industry supervisor, Kemenperin takes in input from industry players on the obstacles they face in increasing productivity and competitiveness. TPT industry players are worried because there is no Lartas on imported goods similar to the goods they produce,” the Director of Textile, Leather and Footwear Industries, Adie Rochmanto Pandiangan, said in Jakarta on Sunday (26/5).
Adie explained that, according to Statistics Indonesia (BPS), the textile and apparel subsector grew 2.64% (yoy) in Q1-2024. In the same period, foreign demand for textiles and apparel also increased in volume, by 7.34% (yoy) for textiles and 3.08% (yoy) for apparel.
Besides export orders, stable domestic household consumption also helped drive growth in the Textile and Apparel Industry and the Leather, Leather Goods and Footwear Industry, in line with the 2024 elections, national holidays, collective leave and the Eid holiday.
Kemenperin is optimistic that the growth of the textile and apparel industry can be further optimized if efforts to prevent consumption of used clothing (thrifting) and market supervision of imported goods in line with applicable rules are stepped up.
However, concerns have arisen among TPT industry players about a flood of imports. Previously, garment and footwear small and medium industries (SMIs) enjoyed a 30–50% increase in domestic demand after technical consideration (Pertek) rules were applied to imported goods under Minister of Trade Regulation Number 36 of 2023 on Import Policies and Regulations, as conveyed by Nandi Herdiaman, Chair of the Bandung Garment Entrepreneurs Association (IPKB), and Endang, representing Bandung footwear SMIs. Garment and footwear SMIs fear the market will soon again be flooded with imported apparel and footwear. “This is not just a worry but a bitter experience we have had in recent years when imports of apparel and footwear were not controlled,” Nandi continued.
This could cause many SMIs to weaken again and lead to production shutdowns. He hopes the government will reinstate market protection against the flood of imports, whether through Pertek or other rules.
Another statement came from the Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wirawasta, who said import controls will not be effective because everything has already been relaxed.
“We initially welcomed the Ministry of Trade's move to control imports through Permendag No. 36/2023. It was disseminated from December 2023 and took effect on 10 March 2024. So the container pile-up happened because of unscrupulous importers who did not want to obtain Import Approval permits,” he said. In his view, of the 26,000 containers reported held up, 85% were finished goods belonging to trading importers and only 15% were actually for manufacturing.
Redma added that for industry to grow strong, a vision of industrial integration is needed, namely downstreaming and strengthening upstream. However, he believes this vision of industrial development and integration is not supported by other ministries, which could lead to deindustrialization with industry as the victim.
He believes the absence of rules serving as import control tools can affect the investment climate and the development of the domestic textile industry, which in turn affects employment.
Source: Press Release of the Ministry of Industry of the Republic of Indonesia