Jakarta. Trade Minister Budi Santoso has denied that the recent ministerial regulation on import relaxations had caused the downfall of Indonesia’s textile giant Sri Rejeki Isman (Sritex).

The Semarang commercial court recently declared Sritex bankrupt, thus potentially causing 50,000 people to lose their jobs. Earlier this year, then-Trade Minister Zulkifli Hasan issued a ministerial regulation on amendments that eased Indonesia’s import curbs.

According to media reports, Sritex president commissioner Iwan Setiawan Lukminto admitted that the said trade rules on import relaxations had dealt a fatal blow to the textile industry, including the company itself. The Industry Ministry even blamed Indonesia’s declining manufacturing sector on the aforementioned ministerial regulation. The Trade Ministry, however, refuses to take the blame.

“We have already made clarifications that the 2024 ministerial regulation [on the import relaxations] actually aimed to protect the textile industry,” Trade Minister Budi Santoso told the press after a meeting with fellow economic ministers in Jakarta on Sunday.

Budi succeeded Zulkifli after Prabowo Subianto assumed the presidency on October 20.

According to Budi, the new regulation still requires imported textiles to have what he calls the “technical considerations” letter. The Industry Ministry is responsible for issuing this document. The Trade Ministry’s international trade agency has set up an import quota on imported apparel. Foreign-made textiles and apparel are also subject to duties.

“I think this is all just a miscommunication,” Budi said, commenting on accusations that the Trade Ministry was culpable for Sritex’s bankruptcy.

President Prabowo has instructed his cabinet to come up with a plan to rescue the textile industry, including Sritex. Budi, however, told the press that saving the textile industry was not the Trade Ministry’s job.

The government has allowed Sritex to resume its export-import operations after the court gave a bankruptcy verdict after the company struggled to pay its debts. By allowing the export-import activities, Sritex should be able to continue its operations, according to Chief Economic Affairs Minister Airlangga Hartarto.

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