The free competition of the domestic textile industry with Bangladesh must be responded quickly by the government with a series of policies to sustain competitiveness. This follows the target of completing the Indonesia-Bangladesh Preferential Trade Agreement (IB-PTA) this year. The Institute for Development of Economics and Finance (Indef) underlined that an open market is a necessity, although it must be supported by an equal level of playing field so as not to harm local industries. Researcher at Indef's Center for Industry, Trade and Investment Ahmad Heri Firdaus said that in order to be competitive, the government should provide incentives to intervene in the production cost structure so as to pursue the competitive advantage of Bangladeshi textiles.

"The government must respond quickly because this is not a matter of one or two sectors. The government in various ministries and institutions must immediately hold limited meetings and produce policies that make our textile industry able to compete on a level playing field," said Heri, Tuesday (8/3/2022). .

A number of factors in the production cost structure such as industrial gas, electricity, worker wages, and ease of logistics must be taken into account by the government, both in negotiating agreements and in formulating incentives.

Heri believes the textile industry will remain one of the prima donnas among other manufacturing sectors. Instead of experiencing a sunset, the textile industry can continue to grow if it is supported by policies that support performance and recovery.

"We do not close ourselves off to compete with other countries, but local industries must be considered," he continued.

Meanwhile, on the level of playing field, Indonesia is considered to be unable to compete with Bangladesh. From industrial gas prices, for example, Bangladesh applies a price of US$3.22 per MMBTU for textile players. In addition, the electricity tariff is also flat at US$ 0.105/kWh. Bangladesh is also the second largest exporter of apparel in the world with a value as of 2020 of US$36.13 billion.

Compare that to industrial gas prices in Indonesia, which range from US$11-12 per MMBTU, and electricity rates are not flat with more expensive curfews. In terms of export performance, Indonesia ranks 11th in the world with a value of US$6.98 billion.