The influx of unbranded imported textile goods at low prices is increasingly disturbing domestic industry players. This phenomenon makes local producers scream because they are unable to compete in the market, especially due to illegal import practices which are increasingly common in Indonesia.
Chairman of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wirawasta, revealed that the increase in illegal imports was the impact of the United States (US) high tariff policy on a number of countries, including China. As a result of this policy, many Chinese producers are using Indonesia as an alternative trade route through the practice of transshipment, namely moving goods between countries to obtain an Indonesian Certificate of Origin (SKA) to make it appear as if the product was made locally.
According to Redma, this step is not only illegal in the eyes of the US, but also endangers Indonesia's position in global trade. If this practice is proven to be carried out in Indonesia, the US has the potential to impose higher import tariffs on Indonesian products. Apart from that, these illegally imported products enter without paying taxes and import duties, so they can be sold at very cheap prices. This condition makes it difficult for local textile producers to compete in the domestic market.
Redma emphasized that law enforcement is the main key to stopping illegal import practices. He highlighted the need for internal cleaning at Customs so that it is free from individuals who have been involved in fraudulent practices. Apart from that, he proposed improving the customs system by replacing the inland manifest with a master bill of lading from the country of origin so that the potential for document falsification could be reduced. Each container also needs to be scanned with an AI Scanner to ensure data conformity with official documents, while eliminating the "red-green lane" system which often becomes a loophole for deviations.
Executive Director of the Indonesian Textile Association (API), Danang Girindrawardana, also highlighted the weak supervision of the flow of imported goods. He explained that many goods entered Indonesia illegally, not without permits, but by obtaining incorrect permits. This condition makes the price of imported goods much cheaper than local products.
Danang also highlighted the imbalance in trade data between Indonesia and partner countries such as China and Singapore, which showed a significant spike in illegal imports. It is estimated that around 10,000 containers of illegally imported goods enter every month, causing oversupply conditions in the domestic market and putting pressure on domestic production capacity.
However, Danang sees positive steps from the government through the issuance of Regulation of the Minister of Trade (Permendag) Number 17 of 2025 which tightens imports of finished goods, as well as a Regulation of the Minister of Industry regarding procedures for issuing technical considerations for imports of textiles and textile products (TPT). According to him, these two regulations are a form of the government's commitment to improving the import trade system and protecting local industry from fraudulent practices by rogue importers.
He hopes that the implementation of the two regulations will be carried out consistently so that Indonesia can be free from illegal import practices that are detrimental to national industry. With strict supervision and strict law enforcement, it is hoped that local textile industry players will once again have room for healthy growth amidst increasingly fierce global competition.