Jakarta. The Indonesian government has extended safeguard tariffs on imports of textiles, carpets, and other fabric coverings for another three years in a bid to protect and enhance the competitiveness of the domestic textile industry.

The extension of these import duties is outlined in two new regulations: Finance Minister Regulation (PMK) No. 48/2024 for textiles and PMK No. 49/2024 for carpets and other fabric coverings. The decision aims to counteract challenges faced by the textile and textile product (TPT) sector, which has struggled to return to pre-pandemic levels due to declining domestic and export demand and increasing competition.

The TPT sector has seen a decline in employment, with the workforce dropping from 3.98 million in 2023 to 3.87 million in 2024. The influx of textile imports, particularly from China, has further exacerbated the situation, prompting the government to take action to safeguard the industry and its significant employment base.

"The government is closely monitoring this situation and providing solutions to support the long-term recovery of the TPT industry's fundamentals," said Febrio Kacaribu, Head of the Fiscal Policy Agency at the Ministry of Finance, in a statement on Thursday.

The trade remedies introduced are designed to align with the development of the national industry and maintain the competitiveness of domestic textiles. The formulation of these regulations involved input from various stakeholders, including relevant ministries, industry associations, and trading partners, in line with World Trade Organization (WTO) guidelines.

Indonesia's workforce is under pressure due to the global economic slowdown and heightened competition, leading to a sharp increase in job losses, particularly in the textile sector. The Manpower Ministry reported 32,064 layoffs between January and June 2024, a 21.4 percent rise from 26,400 in the same period last year.

The Indonesian Filament Yarn and Fiber Producers Association (Apsyfi) noted that around 30 textile factories shut down, causing 10,800 layoffs from January to May 2024, up from 7,200 layoffs in 2023 in Bandung and Surakarta.

The Confederation of Indonesian Workers (KSPN) reported nearly 50,000 layoffs in the textile and textile product (TPT) industry from January to early June 2024. However, many companies are reluctant to disclose layoffs to avoid impacting their relationships with banks and buyers.

West Java and Central Java, home to the largest concentration of the textile industry, have seen the highest number of layoffs.