The domestic textile industry is facing great pressure due to the strong flow of imported and smuggled goods. The Chairman of the Indonesian Filament Fiber & Yarn Producers Association (APSyFI), Redma Gita Wirawasta, said that this condition has forced many companies to close down, harming the national economic potential of up to IDR 235 trillion.
Redma explained that the textile industry actually has very large added value. As an illustration, raw materials such as Paraxylene (PX) which are purchased for IDR 5,000 per 0.30 kg can produce 1 kg of clothing worth IDR 104 thousand, providing added value of more than 200%. With domestic garment consumption reaching 2.26 million tons per year, the economic value of the textile industry should be able to reach IDR 235 trillion.
The textile industry also makes a significant contribution to state revenue. With a Value Added Tax (VAT) of 11%, this sector is estimated to contribute IDR 25 trillion per year. Not to mention the VAT on cotton commodity imports which can generate around IDR 18.95 trillion per year.
However, this great potential is threatened by the massive influx of imported goods, especially in fabric and garment products. This has a negative impact on the yarn and polyester sectors which have experienced a decline in production capacity, even causing a number of factories to close.
Redma also questioned the accuracy of the textile sector economic growth data released by the Central Statistics Agency (BPS). The data shows a growth of 7.43% in the third quarter of 2024, but this figure is considered not to reflect reality due to the large number of unrecorded illegal imports.
Furthermore, Redma encouraged the government to prioritize the use of local products in national projects, such as the procurement of school uniforms, in order to support the domestic industry. If this condition continues, the textile sector is at risk of losing its competitiveness and becoming a burden on the national economy.
He concluded with a warning that if the import onslaught is not handled seriously, the Indonesian textile industry will continue to decline, from fabric producers to the yarn and polyester sectors, which play an important role in the national supply chain.