The Indonesian Fiber and Filament Yarn Producers Association (APSyFI) has highlighted the growing pressure faced by Indonesia’s textile and textile products (TPT) industry from dumped and illegal imports, as President Prabowo undertakes a cabinet reshuffle aimed at strengthening the government’s economic agenda. The association sees the change in leadership at the Ministry of Industry as an opportunity to reinforce the country’s manufacturing sector and create a stronger foundation for industrial growth.
APSyFI Chairman Redma Gita Wirawasta said the textile industry remains an important part of Indonesia’s manufacturing base, but its contribution to gross domestic product (GDP) is currently only around 0.9%. He argued that the figure needs to rise significantly, reaching more than 3%, if the government is to build a stronger manufacturing sector and support President Prabowo’s broader economic growth ambitions. In this context, the appointment of Muhammad Sarmuji as the new Minister of Industry is viewed by industry players as a potential turning point for policy direction and industrial development.
The challenge, however, is not simply a matter of increasing production capacity. The textile industry requires a supportive and integrated industrial ecosystem that can encourage investment, improve competitiveness and provide greater certainty for businesses. Clear industrial policies and a consistent government vision are considered essential because investment decisions in manufacturing typically require substantial capital and long-term commitments. Without sufficient certainty over market conditions and government policy, companies may become more cautious about expanding capacity or making new investments.
For the TPT sector, the development of such an ecosystem is particularly important because the industry operates across a broad supply chain, ranging from fiber and filament yarn production to spinning, weaving, dyeing, garment manufacturing and other downstream activities. Weaknesses in one part of the chain can affect the competitiveness of the industry as a whole. Strengthening domestic production therefore requires policies that address the sector in an integrated manner rather than focusing only on individual segments.
Another major concern raised by APSyFI is the increasingly uneven competitive environment in the domestic market. Indonesian textile manufacturers must compete not only with established international producers but also with imported products that enter the market through dumping practices or illegal channels. Such conditions can put additional pressure on domestic producers, particularly when imported goods are offered at prices that domestic manufacturers struggle to match.
The impact extends beyond individual companies. Persistent pressure from low-priced imports can weaken production, reduce incentives for investment and undermine the development of domestic industrial capacity. If manufacturers cannot compete on relatively equal terms, the resulting decline in production can also affect employment, supply chains and the broader contribution of manufacturing to the national economy. This makes effective trade enforcement and stronger market oversight important components of industrial policy.
Logistics inefficiency is another factor that continues to weigh on the competitiveness of domestic textile products. High logistics costs can increase production and distribution expenses, making locally manufactured goods less competitive against imported products. Improving transportation, distribution and supply-chain efficiency would therefore complement efforts to protect the domestic market from unfair competition. A more efficient logistics system could help manufacturers reduce costs while strengthening their ability to compete both domestically and internationally.
For industry players, the policy direction of the new Ministry of Industry leadership will consequently be closely watched. The key issue is whether the government can provide a clearer framework for industrial development while ensuring that domestic producers have adequate access to the market. Greater certainty over domestic demand and stronger enforcement against unfair and illegal imports could provide companies with more confidence to invest in production capacity.
For APSyFI, the leadership transition presents an opportunity to strengthen industrial policy, improve the competitiveness of the textile sector and address structural challenges that have constrained investment and growth. The extent to which these priorities are translated into consistent policies and effective implementation will be important in determining whether Indonesia’s textile industry can increase its contribution to the economy and regain a stronger position within the national manufacturing landscape.
