Domestic Textile Industry Still Under Pressure, Ministry of Industry Mulls Strategic Measures

textile industry
textile industry (photo: Kemenperin)

The textile and textile product (TPT) industry in Indonesia is facing significant challenges due to an influx of textile imports. However, in response to this ongoing issue, the Ministry of Industry (Kemenperin) is actively engaged in strategizing to revitalize and rejuvenate this essential sector.

Taufiek Bawazier, the Acting Director General of Chemical, Pharmaceutical, and Textile Industry, has provided valuable insights into the ministry’s efforts. He has emphasized that a comprehensive evaluation is underway, encompassing a thorough examination of existing regulations and the development of a comprehensive market improvement plan tailored specifically to the textile industry.

In Taufiek Bawazier’s own words, “I am conducting a diagnosis, and I will identify the precise areas that require enhancement. Thus, our approach will be meticulously aligned with the regulatory framework.”

Beyond the realm of Kemenperin’s jurisdiction, Taufiek underscores the imperative of harmonizing these efforts with regulations originating from other ministries. One particular regulation drawing attention is PMK No. 131/2018 concerning Bonded Zones, which permits the entry of imported goods up to 50 percent. Taufiek contends that this regulation merits revision, particularly given the significant surge in imported products inundating the domestic market.

In his vision, revising this regulation could stimulate a value-added approach, creating a circular economy and fostering production cycles right within Indonesia. This outlook underlines the commitment to not just maintain but elevate the economic landscape of the nation.

Moreover, Kemenperin’s strategy involves a meticulous assessment of utility and domestic production volume, coupled with stringent adherence to the Domestic Component Level (TKDN) as stipulated by regulations. Import permits are set to be granted exclusively to companies equipped with domestic manufacturing facilities.

Importantly, this does not entail an outright prohibition of imports but rather the implementation of regulations aimed at curbing excessive reliance on foreign products. Taufiek emphasizes that imported goods can be considered when the local production capacity falls short of meeting the demands of the domestic market.

In a broader context, Taufiek encourages export-oriented industries to optimize their presence in the domestic market. This approach serves as a strategic safeguard, ensuring that even during periods of instability in global export markets, the robust circulation of trade within the domestic sphere acts as a buffer, sustaining the stability of the industrial sector.

It’s crucial to highlight that Kemenperin’s commitment extends beyond fortifying the upstream sector. The regulatory framework governing the downstream aspects of the TPT industry will undergo continuous refinement to ensure alignment with the dynamic needs of the sector.