Jakarta. Redma Gita Wirawasta, Chairman of the Indonesian Filament Yarn and Fiber Producers Association (Apsyfi), said that despite strong consumer demand for textiles, the market is dominated by Chinese imports, leading to the closure of many local textile companies.

Redma criticized the government's plan to impose up to 200 percent import tariffs on textiles as ineffective.

Post-Covid-19, the textile industry saw 8 percent growth in Q1 2022 and 13 percent in Q3, despite export challenges, as local products found a domestic market.

“Our purchasing power for textiles increased in 2022 and 2023 despite economic downturns,” Redma told Beritasatu.com on Wednesday.

Problems arose when the government relaxed import restrictions following licensing issues that caused a backlog of 26,000 containers in May 2024. The government revised Minister of Trade Regulation No. 36 of 2023 after just three months.

“The issue is imported goods. Consumers spend more on imported textiles and garments, whether online or offline. The decline in our textile industry isn’t about purchasing power,” he emphasized.

Chinese sales platforms dominate the distribution chain, worsening the issue. Redma called for tighter controls on imported textiles, both online and offline.

“We rely on foreign platforms for sales. If we had a platform dedicated to domestic products, it would be more effective. The current distribution chain, owned by China, favors Chinese goods. The government needs to address this,” Redma said.

Chinese products are sold at much lower prices, making them more attractive to consumers still recovering economically post-Covid-19. This trend continued throughout 2023, with domestic products struggling to export and imported goods flooding the market, including illegal textiles.

Illegal imports sold below the cost of production force the textile industry to cut production costs and reduce employees. Legal products face regulations, but illegal goods do not, putting local industries at a disadvantage.

Between January and May 2024, 20-30 factories closed, resulting in 10,800 layoffs, an increase from the 7,200 layoffs in 2023 in Bandung and Surakarta.

Redma warned that without government intervention, layoffs in the textile industry will increase. He advised the government to focus on illegal imports instead of imposing a 200 percent import duty, considering Indonesia's membership in the ASEAN-China Free Trade Area (FTA).

“Everyone is focusing on import duty regulations, but the main issue is illegal imports. Without improvements at port entry points and in Customs' performance, eradicating illegal imports will be ineffective,” he stressed.