The domestic market for textile products and textile products (TPT) is still haunted by the current rush of imported products. This should be the government's attention at this time.
What's more, the Indonesian Textile Association (API) revealed that the international market which is the destination for Indonesian textile exports is still not recovering due to the COVID-19 pandemic. Therefore, protection from the government is needed.
"Indonesia is a country with the 4th largest population in the world, making Indonesia a promising target market for many textile producing countries, one of which is China," said API Secretary General Rizal Tanzil Rahman.
Rizal explained that goods imported to Indonesia were not only left over from exports from other countries. But also used clothes which are now widely traded in Indonesia, especially on online shopping platforms and social media.
In fact, the import of used goods has been prohibited in the Minister of Trade Regulation No. 51 of 2015. For this reason, the API demands the Government to impose a Security Act Import Duty (BMTP) for fabric and apparel products.
"BMTP does not interfere with export performance, because it does not affect the supply of raw materials for clothing producers for export destinations, the majority of whom are in Bonded Zones (KB) or Ease of Import for Export Destinations (KITE)," explained Rizal.
Based on API data, since 2018 Indonesia's textile exports have continued to decline. From US$13.22 billion (2018) to US$12.84 billion(2019) and lastly US$10.55 billion in 2020.
According to Rizal, in the first quarter of 2021, Indonesia's textile export market again experienced a slowdown in growth. This is none other than because the condition of the destination country has not yet recovered due to the COVID-19 pandemic.
Currently, Rizal continued, the Indonesian textile industry has been integrated from the upstream to downstream sectors. Where almost all TPT raw materials can be produced domestically.
However, the lack of investment in the domestic raw material industry has resulted in the breakdown of domestic supply chains.
"It takes a push for government investment, especially in the capital-intensive upstream sector to support the raw material needs of the domestic textile industry," said Rizal.
Meanwhile, Vice President of PT Sucofindo (Persero) Soleh R Maryam said that the textile industry is one of Indonesia's mainstay industries today. This industry also absorbs 3.74 million workers, with 1.1 million Small and Medium Industries (IKM).
However, the industry has been heavily impacted by the COVID-19 pandemic. It can be seen from the growth of minus 5.41 percent in 2020. In addition, the production volume had dropped to 85 percent, and the utilization was only 5.05 percent.
Furthermore, according to Solah, apart from being hit by imported products, the national textile industry also has to face the condition of aging machines and high production costs. This challenge must be the government's attention.
"The national textile industry needs to be given incentives, both in the form of tax deductions and a reduction in gas prices for the upstream textile industry," stressed Soleh.
