The textile and textile product (TPT) industry is still facing serious obstacles due to the widespread circulation of illegally imported textile products in Indonesia. Strict action must be taken by the government immediately so that this practice does not become more rampant in the future. Referring to data from the Association of Indonesian Fiber and Filament Yarn Producers (APSyFI), illegal or unrecorded textile imports in Indonesia reached 320,000 tons in 2022, an increase of 12.28% compared to the previous year of 285,000 tons.
The amount of illegal textile imports which reached 320,000 tonnes is equivalent to 16,000 containers per year or 1,333 containers per month. Losses generated by the practice of illegal textile imports reached IDR 32.48 trillion. The government also has the potential to lose revenue in the form of taxes of IDR 19 trillion.
APSyFI Chairperson Redma Gita Wirawasta said, out of a total of 320,000 tons of illegal textile imports in 2022, 210,000 tons of them came from China. The remaining 110,000 tons came from India, South Korea, Taiwan and others.
The most common mode of illegal textile imports so far is in the form of unprocedural imports such as wholesale, under invoice, transhipment, and HS flight. "The composition of the unprocedural import mode is around 70%," he said at a press conference, Friday (31/3).
He said, the importation of unprocedural textiles was carried out by around 60 companies owned by around 8 entrepreneurs. They carry out this practice of importing textiles in various ways, including obtaining import permits for both Importer Identification Numbers for Companies (API-P) and Import Identification Numbers for the General (API-U) for hundreds of millions of meters per company.
These unprocedural textile importers also often cooperate with Customs officers in the field, including import licensers at the Ministry of Trade and Ministry of Industry.
“They (the perpetrators) played a lot of legs. So there are not many players, but there are many ways. One person can handle dozens of companies," said Redma.
In addition, the import mode of used clothing contributes 30% of total illegal textile imports. Local TPT industry players are certainly worried about the circulation of imported used clothes. This is because several years ago the portion of used clothing imports was only 5% to 10%.
Places selling imported used clothing products used to be very limited. The operational time is only on weekends, like a shocked market. Now, imported used clothes are rampant in various places.
Imported used clothes are also easy to find on various e-commerce platforms. In fact, APSyFI also found the fact that there are companies that offer illegal clothing import services on well-known e-commerce platforms.
“In the past, imported used clothes only entered through rat ports. Now these products are already using containers which are certain to go through major ports," Redma explained.
All modes of importing illegal textile products are clearly detrimental to the national textile industry players. This is because, when TPT producers have to spend a lot of money for production and distribution, they end up having to go head to head with illegally imported textile products that do not pay taxes and have no production costs, due to the status of second-hand goods.
APSyFI also recommends conducting a thorough investigation of the import permits that have been granted in the last 5 years, both API-P and API-U, as well as transparency in the issuance of import permits from the Ministry of Trade and the Ministry of Industry for each company.
In addition, APSyFI also asked to carry out an investigation into companies that facilitate wholesale and undername imports that always enter the green lane, including their relation to the green lane convenience facilities provided by Customs officials and transparency in determining green or red lanes.
Not to forget, APSyFI also asked to immediately arrest used clothing importers by tracking them from offline and online traders.
"We are not actually asking for protection, but fairness on the field. This is because it is difficult to compete if the products you are dealing with are not taxable," concluded Redma.
