The Indonesian Textile Association said the planned funding injection would provide “much-needed relief” for the struggling textile and garment industry but warned that financial support alone would not be sufficient without regulatory reforms to ensure long-term competitiveness. — The Jakarta Post
JAKARTA: The domestic textile and garment industry has urged the government to improve access to cleaner energy and tighten import protections following the government’s vow to allocate US$6bil to support labour-intensive sectors.
Coordinating Economy Minister Airlangga Hartarto said on Tuesday that President Prabowo Subianto had pledged to provide the funding “to ensure technology remains competitive and investment continues” in the textile sector, adding that the initiative reflected the President’s focus on safeguarding such industries rather than relying solely on capital-intensive growth.
Employment in the textile industry could rise to as many as seven million workers, given the size of the country’s domestic market, he added.
The move follows a closed-door meeting held by Prabowo with senior ministers at his Hambalang residence in West Java last Sunday to discuss various issues, including strengthening the textile and garment industry through supply chain revitalisation.
The Indonesian Textile Association (API) said the planned funding injection would provide “much-needed relief” for the struggling textile and garment industry but warned that financial support alone would not be sufficient without regulatory reforms to ensure long-term competitiveness.
API chairman Jemmy Kartiwa said the industry was awaiting details of the funding scheme and called on the government to prioritise access to affordable and environmentally friendly energy, particularly natural gas.
“First, we need easier access to cleaner energy sources such as gas for the textile industry,” Jemmy said on Tuesday.
He also urged the government to support lower borrowing costs for labour-intensive manufacturers, saying lending rates should be maintained in the range of 5% to 6% to ease pressure on cash flow and encourage reinvestment.
In addition, Jemmy said domestic producers continued to be squeezed by illegal imports and called for tighter enforcement and stronger non-tariff measures.
“We need non-tariff barriers to reduce the inflow of imported products that enter the country while avoiding taxes,” he emphasised.
The textile and garment sector generated around US$11.9bil in export revenue in 2024, making it one of the country’s largest non-oil and gas export industries, according to industry data.
The United States is Indonesia’s largest export market for textile and garment products, which remain subject to a roughly 19% US tariff, with no exemptions granted, potentially making them less competitive than rivals in the American market.
API executive director Danang Girindrawardana said the funding plan signalled Prabowo’s commitment to addressing employment challenges and supporting industries with large workforces.
“At the end of the day, this will help create jobs, in line with President Prabowo’s target. It also shows his concern over increasingly limited employment opportunities,” Danang said on Tuesday.
The textile and garment industry employs around 3.96 million workers, accounting for roughly 20% of the total manufacturing workforce, and contributed 0.97% to the country’s gross domestic product through the third quarter of last year, according to data from the Industry Ministry. — The Jakarta Post/ANN
