Indonesia’s Minister Expresses Concerns Over Predatory Pricing Impact on Domestic Textile Industry

Indonesia’s Minister of Cooperatives and Small and Medium Enterprises (SMEs), Teten Masduki, has voiced deep concerns regarding the adverse effects of predatory pricing practices applied to imported products on the country’s domestic textile industry.

During a discussion held in Bandung District, West Java, on a Sunday, Minister Masduki drew attention to the escalating influx of imported textile goods, notably those available through online platforms, which are being offered at significantly reduced prices. This trend, he emphasized, has placed domestic textile products at a distinct disadvantage.

“We have received a multitude of complaints in connection with this issue, particularly with regard to products from China being sold at prices that are unreasonably low. This phenomenon of aggressively undercutting prices is what we term as predatory pricing, and it is taking a substantial toll on our domestic traders, brick-and-mortar businesses, and even our local production,” Masduki expressed.

The Minister underscored that the inability of domestic textile products to compete is not attributable to issues of quality. Instead, it is closely linked to the Cost of Goods Sold (COGS) associated with imported goods.

“The COGS figures simply do not align. As a result, our domestic industry faces formidable challenges in maintaining competitiveness. We are resolute in our commitment to delve deeper into this issue. Why are we inundated with an abundance of low-priced imported goods?” queried Masduki.

In the midst of these concerns, Dudi Gumilar, the proprietor of a weaving factory situated in Bandung District, shared his profound apprehensions regarding the pervasive presence of inexpensive imported products.

“Our warehouse still holds a stockpile of 1.5 million meters of textile, and our production persists. However, the sustainability of our operations remains uncertain,” he lamented.

Nandi Herdiaman, Chairman of the Bandung Garment Entrepreneurs Association (IPKB), echoed these sentiments, shedding light on the formidable challenges confronting the textile industry.

According to Herdiaman, numerous textile producers have been compelled to close their businesses due to a sluggish demand environment.

“This dire situation has resulted in unemployment in West Java. We are teetering on the brink. We earnestly beseech Minister Masduki to take decisive measures to address this issue,” he implored.

Minister Masduki, in response, assured that he would transmit the concerns and findings of entrepreneurs to higher levels of authority. Additionally, he pledged to initiate necessary measures aimed at regulating the influx of low-cost imported goods into the domestic market and enhancing the existing regulatory framework.

“I will present this matter for further consideration. Nevertheless, it is important to note that the authority to address this issue does not solely rest with me but is shared with the Ministry of Trade and the Ministry of Finance. Ensuring that the prices of imported goods, particularly those from China, do not dip below the COGS is a critical aspect of our strategy to protect and bolster our domestic industry,” he affirmed.

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