Indonesia’s textile industry is facing severe challenges, prompting the Indonesian Textile Association (API) to call on President Joko Widodo to pay attention. The latest case in this industry is that Duniatex Group, one of Indonesia’s largest textile companies, cannot pay debt interest and loans as scheduled.
In addition to the Duniatex problem, the old problem of imported goods constantly invading the Indonesian market has also persisted, making this industry often considered to be a sunset. Not only that, data from the Indonesia Stock Exchange (BEI) also shows that the outflow of foreign capital from listed companies in the Indonesian textile industry has not stopped since the beginning of the year.
In the relevant meeting minutes, API put forward at least 13 suggestions in the hope of obtaining President Joko Widodo’s response.
First, gather the power of industry to enhance the competitiveness of the “textile and garment” (TPT) industry, so as to increase exports and reduce imports.
Second, we hope to amend Labor Law No. 13 of 2003. The revision mainly focuses on certain provisions that have caused great burdens on Indonesia’s TPT industry and undermined the sound development of Indonesia’s national garment industry.
Third, sign trade agreements with countries that import Indonesian products to enhance the penetration of Indonesian products in the export market.
Fourth, simplify tax laws. API requires that value-added tax (VAT) be levied only on the final product, and no VAT is charged on the distribution of goods and services from upstream to downstream.
Fifth, API provides investment experience in Ethiopia and India as a reference. Investing in both countries offers various incentives and services to expedite the acquisition of necessary licenses.
Sixth, API hopes to reduce the energy costs of electricity and natural gas in Indonesia through relief or other mechanisms.
Seventh, the industry hopes that the industrial parks in Central Java (CentralJava), East Java (EastJava) and West Java (WestJava) will be directly controlled by the President so that they can Accelerate the construction of Indonesian textile factories and ecosystems in a short period of time and maintain a sound Indonesian garment industry.
Eighth, API believes that close attention and focus should be placed on the TPT industry, so it is recommended to appoint the highest-level officials (Secretary-General) within the Ministry of Industry, Trade and Labor ) specializes in the TPT industry.
Ninth, when API promotes the development of this industry, it sees huge market opportunities at home and abroad, so the president needs to consider the necessity of enacting the “Ready-made Garments Act.”
Tenth, it is necessary to amend the two regulations of Permendag64/2017 and Permendag18/2019. It is hoped that the process of amending the above-mentioned legal provisions will be accelerated and get the full support of the President.
Eleventh, it is necessary to speed up the revision of the Environmental Candy (LH) Act. This decree increases the burden on the TPT industry because wastewater management in the TPT industry is more difficult than in other industries.
Twelfth, API supports strengthening vocational education policies. But higher vocational education also needs government attention, lest sufficiently qualified workers exist only in the operator class.
Thirteenth, the TPT industry is ready to cooperate with Micro, Small and Medium Enterprises (MSMEs) to enable collaborative operations between large enterprises and MSMEs. TPT Industry is also ready to support Indonesian brands, retailers and designers to develop fast fashion and modest fashion (modestfashion) clothing in Indonesia. (Note: Modesty fashion refers to clothing that conforms to the principles of Islamic faith.)
