In a move to fortify its domestic textile industry against the impact of imports, the Indonesian government has commenced a safeguard investigation on textile products. Spearheaded by the Indonesian Trade Safeguard Committee (KPPI) under the Ministry of Trade, this investigation follows a formal request from the Indonesian Textile Association (API) in September.
The decision to initiate the investigation stems from concerns over the declining workforce in the domestic textile industry and the diminishing market share of local manufacturers. Recognizing these indicators, the Ministry of Trade aims to protect the interests of the domestic industry against the influx of foreign shipments.
In a press release on October 31, acting KPPI Chairman Nugraheni Prasetya Hastuti stated that the committee has observed preliminary signs of substantial losses or threats of serious losses resulting from the surge in textile imports. The investigation will specifically focus on cotton woven fabric, man-made filament yarn, cotton sewing thread, cotton yarn, and fabric woven from man-made filament yarn.
According to the Ministry, imports of these textile products have surged from 14,843 tonnes in 2019 to 29,908 tonnes over the past four years. This upward trend has raised concerns about its potential impact on the domestic industry.
This safeguard investigation aligns with measures authorized by the World Trade Organization (WTO) and is a standard practice conducted by its member states. Such initiatives are designed to ensure fair competition and protect the economic interests of domestic industries.
The Indonesian textile and garment industry is currently grappling with operational challenges, with companies experiencing a significant drop in export revenue due to decreased demand from foreign markets amid the ongoing global economic downturn. The outcome of the safeguard investigation is eagerly awaited as it will play a crucial role in shaping the future trajectory of Indonesia’s textile trade policies.
