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Influx of imported products hurt local textile industry
Local textile producers plan to apply to the Indonesian Trade Security Committee for the imposition of a safeguard import duty because imports have severely injured the local textile industry.
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Employees inspect sheets of fabric for school uniforms at a garment factory in Bobojong, Tasikmalaya, West Java, (Antara/Adeng Bustomi)
T
he 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 in in Jakarta on Monday.
Indonesian Association of Synthetic Fiber Producers (APSyFI) secretary-general Redma Gita Wirawasta said that fabric imports increased threefold from 300,000 tons in 2008 to 900,000 tons in 2018, while garment exports stagnated at about 550 million tons over the same period.
The local textile producers said that they were unable to compete because the foreign textile producers carried out dumping practices in the Indonesian market.
In order to protect the local textile industry, API and APSyFI plan to apply to the Indonesian Trade Security Committee (KPPI) for a safeguard policy because the imports have severely injured the local industries.
