The influx of imported textile products has not only caused a widening of the trade deficit but also the closure of local textile factories. According to the Indonesian Textile Association (API), as many as nine textile factories have been closed and at least 2,000 workers have been dismissed because garment producers prefer to buy imported fabrics. API’s chairman Ade Sudrajat Usman said that the influx of the imported textile products mostly affected the medium processing industry involved in spinning mills, weaving and knitted fabric production as they have to pay a 5 percent import duty on their raw materials such as thread and filament, while imported fabrics can enter Indonesia without any import duty. As the result, imported fabrics are far cheaper than domestically produced ones. "This is a red alert for the textile industry," he said at a press conference...

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