Indonesian textile and textile products (TPT) exports in the first two months of this year were valued at US$2 billion or 3 percent higher than in the same period last year as the TPT industry has been integrated from upstream to downstream sectors as a result they could compete well globally, said Industry Minister Airlangga Hartarto.
In 2016 investment in TPT industry was worth Rp7.54 trillion with exports valued at US$11.87 billion employing 17.03 percent of workers in the manufacturing sector. PT industry is a labor industry providing jobs for around 3 million people that it could serve as a social safety net, said Airlangga.
However, the industry needs revitalization as the majority of factories now use old machines especially weaving and knitting factories. The machines need replacement as they are no longer efficient.
Revitalization, they have begun by using new machines and equipment has shown positive result , but the program has to be continued.
In addition, economic policy packages already issued by the government should be utilized by TPT industrialists by increasing investment, otherwise, in five years, the country’s TPT industry would find it more difficult to face competition such as from India, China, Vietnam and Bangladesh.
He said currently the Industry Ministry is preparing a special regulation on fiscal incentive in the form of fiscal allowance for export oriented labor intensive industry. Industrialists will have income tax discount to be used for business expansion, he added.
The Industry Ministry is seeking comprehensive cooperation agreement with Europe and the United States in the hope of benefit in the form of better tax facility. Also small industries would be facilitated to boost exports.
In addition, the Industry Ministry is encouraging investment in the upstream sector to back up the domestic textile industry.
According to Director General of Chemical, Textile and Multifarious Industries Achmad Sigit Dwiwahjono, imports of cloth are also a challenge hampering investment in TPT industry for which the Industry Ministry is teaming up the trade Ministry to curb textile imports to protect the country’s TPT industry.
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