Several textile and textile product (TPT) industry associations met with government officials to discuss the alarming decline of dozens of domestic textile companies. The meeting, held at the Ministry of Industry on December 19, 2024, aimed to address critical regulatory concerns and propose solutions to support the struggling sector.
Redma Gita Wirawasta, Chairman of the Indonesian Filament Yarn and Fiber Producers Association (Apsyfi), revealed that the meeting focused on revising Minister of Trade Regulation (Permendag) No. 8/2024 concerning import policies.
“The associations prefer reverting to Permendag 36/2023 and Minister of Industry Regulation (Permenperin) 5/2024, as Permendag 8 removes technical verification requirements (Pertek) for ready-made garment imports, which has significantly increased import volumes,” Redma stated.
Rising Imports: A Major Threat to the Textile Industry
One of the most pressing concerns discussed was the surge in ready-made garment imports, which, according to Redma, increased by a staggering 18-fold after the elimination of Pertek under Permendag 8/2024. This import surge has been identified as a primary factor in the downturn of the domestic textile industry.
“The textile industry is an interconnected ecosystem, spanning upstream to downstream sectors. A disruption in one segment impacts the entire value chain, from fiber and yarn production to garment manufacturing,” Redma explained.
He emphasized that the current policy not only affects garment production but also undermines upstream sectors like fiber and yarn manufacturing, creating a ripple effect throughout the industry.
Next Steps and Broader Stakeholder Involvement
Redma highlighted that the meeting was just the beginning of discussions, and no final decisions were made. Follow-up meetings are planned to formulate the best solutions for all stakeholders.
The audience included representatives from Apsyfi, the Indonesian Textile Association (API), as well as associations representing garment manufacturers, footwear producers, and retailers. On the government side, attendees included officials from the Ministry of Industry (Kemenperin), Ministry of Trade (Kemendag), Directorate General of Customs and Excise (Bea Cukai), and the Coordinating Ministry for Economic Affairs (Kemenko Perekonomian).
The Impact on Domestic Textile Companies
Apsyfi previously reported that around 60 textile companies have collapsed over the past two years. Among these, 34 companies have shut down completely, while others have resorted to workforce reductions, furloughs, or relocations to cut costs.
“This has resulted in approximately 250,000 layoffs,” Redma noted. He warned that the numbers could increase, as companies often delay reporting closures until after settling obligations with their workers.
A Call for Urgent Action
The meeting underscored the need for swift and coordinated action to address the challenges faced by the textile industry. Stakeholders are calling for stricter regulations on imports, better enforcement mechanisms, and policies that support the recovery of domestic manufacturers.
The upcoming discussions are expected to provide a roadmap for reviving Indonesia's textile sector, ensuring its sustainability and competitiveness in the face of mounting global challenges.