The Indonesian textile industry is going through a very difficult and challenging phase, influenced by both, unfavorable domestic as well as global factors.
An economist from Atma Jaya University, Sri Susilo offered several suggestions to the Indonesian government to maintain the buoyancy of the sector.
The first was the need to protect the industry by restricting legal and illegal imports of textiles and garments and emphasized that these restrictions are important.
He suggested increasing import tariffs on textiles and garments, while also offering incentives such as tax reductions to support the textile sector
The economist identified three main causes for the falling demand in the domestic market. The first is people spending more on essential items rather than spending on discretionary items like textiles.
The second cause is that domestically produced products are unable to compete with unlimited imported products on price. The third cause is the increasing sale of used clothing.
He observed that the trend of buying second-hand garments is attractive to many consumers because it is much more affordable, but becomes a challenge for textile manufacturers.
He added that the industry has to explore various alternatives to survive including reducing production, shorter working hours, and even reducing the number of employees.
He advised the government to help the textile industry in finding non-traditional export markets, as expansion into new markets may offer new opportunities for the industry.
He ended by saying that the industry needs a comprehensive solution, both from the government and financial institutions to mitigate the challenges.
He hoped that government support and prudent policies could bring the textile sector out of the crisis it is experiencing in current times.
