Deputy Chairman of Commission VII of the Indonesian House of Representatives, Eddy Soeparno, admitted that he was worried regarding the fact that the Indonesian government was unable to stem the flood of textile and textile product (TPT) industries from abroad, thus hitting the domestic industry.
Citing data from the Ministry of Industry (Kemenperin) cumulatively in January-May 2024, TPT exports decreased by 0.95% compared to the same period last year. However, the TPT import figure in January-May 2024 actually increased by 0.81%. Thus, the trade balance experienced a slowdown of 4.55%.
“I’m stressed, ma’am. I’m stressed and anxious because I didn’t expect the textile industry to be so weak and our dependence on imports to be so great. We are unable to fend off imports,” said Eddy in a hearing (RDP) with the Ministry of Industry at the Senayan Complex, Tuesday (9/7).
The National Mandate Party (PAN) politician said that domestic TPT products were less competitive than imported products. Chinese-made products that are cheaper than domestic products, create unhealthy business competition.
Citing data from the Central Statistics Agency (BPS), China dominates the supply of knitted clothing and accessory products (HS 61) in Indonesia with control of 38.76% of the total goods and supplying 30.28% of non-knitted clothing and accessory goods (HS 62) during January-March 2024.
“We are unable to compete with imported products because the prices are so cheap, not to mention illegal imports. This makes our competitiveness weak,” he said.
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Eddy regretted the government’s unresponsive steps to control the flood of imported TPT products from abroad. According to him, Indonesia, which has a large market share of the TPT industry, failed to control product sales domestically.
“We have a big market, but our market is being exploited continuously and we (don’t) do anything,” he added.
Acting Director General of Chemical, Pharmaceutical and Textile Industry (IKFT) of the Ministry of Industry Reny Yanita explained that global conditions are the cause of the sluggish domestic TPT industry. This condition is influenced by the pandemic and geopolitical and global economic turmoil. In 2023, the TPT industry will slow down due to the impact of Russian inflation on Ukraine and the occurrence of a surplus in domestic production in China due to the trade war with the United States.
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“Indeed, China is currently experiencing a surplus in TPT production. When China maximizes its overseas market, Indonesia becomes one of the main destinations,” he explained.
Renny said that with the issuance of the Minister of Trade Regulation (Permendag) Number 8 of 2024 concerning the Third Amendment to the Minister of Trade Regulation Number 36 of 2023 concerning Import Policy and Regulation, TPT imports increased in May 2024 to 194.87 thousand tons from the previous 136.36 thousand tons in April 2024.
The condition of the domestic TPT industry is worsened by the rampant illegal imports and imports of used clothing or thrifting. Acting Director General of IKFT Kemenperin added that the variety of free trade agreements (FTAs) is not appropriate to protect the domestic textile market.
“The applicable import tariff or most favored nation (MFN) tariff is already harmonized, but we have an attractive FTA so this instrument is not effective,” he said. (Z-8)
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