The Ministry of Industry (Kemenperin) said that the weakening of the textile and textile products (TPT) industry was not only triggered by the flood of imported goods into the domestic market, but also the existence of regulations regarding bonded zones. The regulation in question is Minister of Finance Regulation (PMK) No.131/PMK.04/2018 concerning Bonded Zones. The regulation stipulated by the Minister of Finance Sri Mulyani Indrawati states that imported goods and/or goods originating from other places in the customs area that are oriented for export can be channeled to the domestic market.

Spokesperson for the Ministry of Industry, Febri Hendri Antoni Arif, said that there were many imported products in bonded areas that were oriented towards the export market, but instead flooded the domestic market.

"There is a PMK which states that export products that are not absorbed by foreign markets can be sold in the domestic market," said Febri, quoted on Sunday (1/10/2023).

This is considered to have triggered instability in the national textile industry, which is currently still in a contraction phase due to the flood of imported products. He also did not deny that the weakening export market made it difficult for textile products to be absorbed in the global market.

Meanwhile, Article 31 of the PMK concerning Bonded Zones states that the release of production results to other places within the customs area is carried out in a maximum amount of 50 percent of the total value of realized exports and sales to various regions.

"We see that this is one of the problems, so there are industrial products in bonded zones that are export-oriented but instead enter the domestic market," he said.

Likewise, Acting Director General of the Chemical, Pharmaceutical and Textile Industry, Taufiek Bawazier, said that his party was currently evaluating it from a regulatory perspective and creating a scheme to improve the textile industry market.

"I will try to diagnose, I will try to see which points need to be corrected, so we will look at the regulations later," said Taufiek Bawazier to journalists, quoted Friday (22/9/2023).

PMK Regulation No. 131/2018 is of concern because the regulation allows up to 500 percent of imported goods from bonded areas to enter the domestic market. According to him, these regulations need to be revised in line with the massive number of imported products flooding the domestic market.

"If we think 50 percent is okay but the input still comes from within the country, so there can be added value there, have a circular economy, circular production in Indonesia," he said.

In this case, his party will check utilities and domestic production volumes and ensure that the domestic content level (TKDN) meets the regulations. In particular, import permits are only allowed for companies that have domestic factories.

However, this does not mean that industries are not allowed to import, it is just that the Ministry of Industry will make regulations to reduce the use of foreign products. He added that purchases of imported goods could be made if local production did not meet the needs of the domestic market. Taufiek asked export-based industry players to optimize the domestic market so that when the export market experiences a decline due to the unstable global economy, domestic trade circulation can still maintain industrial stability.

"Let's say the demand is 10 domestic production 5. Later we won't give 5 [for imports], we will give 3 import permits. So, 2 we will tell you to increase utilization," he said.