Government and business efforts to improve the national Textile and Textile Products (TPT) industry continue to face various challenges. In addition to pressure from imported products and the circulation of illegal goods, limited access to capital is now a serious problem directly felt by industry players.
Several entrepreneurs have complained about the difficulty of obtaining financing from banks. Citing a report by Kontan.co.id, PT Mayer Indah Indonesia conveyed this situation in a meeting with Finance Minister Purbaya Yudhi Sadewa. PT Mayer Indah Indonesia's General Manager, Melisa Suria, revealed that from September to December, her company had approached more than 20 banks to apply for working capital loans. However, all applications were rejected.
According to Melisa, banks consider the textile industry to be high-risk and therefore not a priority for financing. She stated that the textile industry is currently considered to be on an "orange to red light," which makes banks reluctant to provide credit or financing assistance.
This situation is permitted by the Indonesian Filament Fiber and Yarn Producers Association (APSyFI). The Secretary General of APSyFI, Farhan Aqil Syauqi, stated that the perception of risk in the textile industry remains very strong in the banking sector. Furthermore, when credit is obtained, the interest rates charged range from 10% to 13%, a figure considered too high by industry players.
Farhan believes this situation is counterproductive, considering that the textile industry is currently in a transition phase toward more sustainable practices. This transformation requires financing support with more competitive schemes. He emphasized that 2026 will be a crucial period for the sustainability of several textile companies, particularly in the upstream sector. Therefore, APSyFI is encouraging government and banking support through low-interest credit policies.
Regarding the garment industry, the Chairman of the Indonesian Garment and Textile Association (AGTI) believes the various problems plaguing the textile industry are the result of a multitude of factors. One of these is government policies, which are often inconsistent and do not support an efficient business climate due to numerous regulatory barriers.
Competition in the textile industry is also increasingly fierce, both in the export and domestic markets. Without real support from the government and relevant institutions such as the Financial Services Authority (OJK) and Bank Indonesia (BI), the national textile and textile industry is expected to fall further behind its competitors.
Pressure on businesses is further exacerbated by the planned increase in the Provincial Minimum Wage (UMP) in 2026, which will average 6% to 7%. AGTI believes this wage increase has the potential to burden businesses if not accompanied by increased productivity and cost efficiency. Furthermore, industry players are urging the government to reduce overlapping regulations and excessive certification burdens, as these costs ultimately accumulate in the production cost structure.
Despite facing various challenges, AGTI emphasizes that the textile and textile industry is not in decline. However, it acknowledges that the performance of the national textile industry has experienced a downward trend for nearly three decades. In the 1980s, Indonesia was a benchmark for the global textile industry and embraced this sector as an industrial strategy to promote clothing independence.
Currently, Indonesia lags behind several Asian countries such as China, Bangladesh, Vietnam, India, Pakistan, and Cambodia. Data shows that in 2024, Vietnam's textile exports reached US$44 billion and Bangladesh's US$38.48 billion, while Indonesia only recorded exports of around US$11.9 billion. Nevertheless, AGTI assesses that the textile and textile industry still has a wide potential if comprehensive improvements are implemented.
AGTI encourages the government to benchmark itself against countries that have successfully developed their textile industries, such as Vietnam, in terms of supply chain efficiency and investment integration. Furthermore, Indonesia should also learn from China, Thailand, and South Korea regarding strengthening modern retail systems and market digitization, as well as simplifying licensing regulations.
According to AGTI, various incentives and facilities should not only focus on new foreign investment. Local businesses and foreign direct investment (PMA) companies that have long operated and contributed to Indonesia also need similar support so that the national textile industry can regain its competitiveness amidst global competition.