The decision follows an investigation by the Indonesian Trade Security Committee or KPPI, which found a surge in imports of woven cotton fabrics that “caused serious injury to the domestic industry”. — The Jakarta Post
JAKARTA: The government has signed a regulation to impose safeguard duties on woven cotton fabrics to curb imports of the commodity in a bid to protect local industry. Finance Ministry Regulation No. 98/2025 was signed by Finance Minister Purbaya Yudhi Sadewa on Dec 22, with the tariffs set to take effect soon.
The regulation states that authorities may impose import duties or safeguard tariffs when “there is a surge in imports” of a commodity that directly competes with domestically produced goods, in order to prevent injury to the domestic industry.
A safeguard duty is a temporary customs duty enforced under the emergency provisions of the World Trade Organization (WTO) Agreement on Safeguards, which entered into force in 1995 alongside the establishment of the WTO.
The decision follows an investigation by the Indonesian Trade Security Committee or KPPI, which found a surge in imports of woven cotton fabrics that “caused serious injury to the domestic industry”.
The tariffs will apply to 16 commodities defined by their eight-digit harmonised system codes, with duties ranging from 2,900 rupiah (17 US cents) to 3,300 rupiah per m of imported fabric.
The levies will apply to imports from all countries and will be imposed in addition to existing general import duties and tariffs under current trade agreements.
However, the ministry has exempted imports from 122 countries classified as “emerging WTO member states” from the additional levy. Importers must include a certificate of origin if the products come from exempted countries, such as Bangladesh.
China, however, is not on the exemption list, nor are India and Vietnam.
The KPPI probe began in late 2023 following a formal request from the Indonesian Textile Association or API.
The initial investigation covered not only woven cotton fabrics but also artificial filament yarn, cotton sewing thread, cotton yarn and woven fabrics made from artificial filament yarn.
Indonesia’s imports of these products rose to 29,908 tonnes in 2023 from 14,843 tonnes in 2019, according to Statistics Indonesia or BPS.
The investigation has been part of the WTO safeguard procedure commonly used by member states and can ultimately result in import bans on specific commodities to protect domestic industries.
When an investigation determines that imports are harming the domestic industry, the committee may recommend appropriate measures to the relevant authorities.
Indonesia’s textile industry has struggled to stay afloat, with firms reporting plunging exports due to weakening demand from foreign buyers amid the global economic slowdown.
Unable to offset the drop in export demand, local producers have also faced a flood of imported clothing, as major textile-producing countries such as China, India, Vietnam and Bangladesh compete for a share of the shrinking global market.
In late last year, API urged the government to renegotiate trade terms with the United States to secure zero tariffs on garment and textile products, warning that the duties threaten the survival of workers in the labour-intensive sector.
The comments followed a statement by the Coordinating Economy Minister Airlangga Hartarto that all Indonesian exports to the United States would still face a reciprocal tariff of 19%, with exemptions limited to “tropical natural resource commodities” such as minerals and palm oil.
Manufactured products, including garments and textiles, will remain subject to the levy. — The Jakarta Post/ANN
