Indonesian apparel exports hit by change in govt policy

“Indonesian textile and garment exports have fallen at a time, when exports from competitor countries like Vietnam, China and Cambodia has grown”, Mr Ade Sudradjat – Chairman, Indonesia Textile Association (API) tells fibre2fashion.

He says, “Most of this decline in exports has come about because of a new government policy which disallows garment producers from sub-contracting garment production to third parties, a practice common in other countries”.

Mr Sudrajat expects Indonesian textile and clothing industry shipments to close the year with a 5 percent negative growth from that achieved in 2012, when it posted $13.2 billion in export revenues.

Reacting to the fall in exports, Indonesia's Industry Minister MS Hidayat says, “The Government has implemented several anticipatory moves in response to decline in growth in the sector, among others by providing fiscal incentives”.

Listing out the initiatives, he informs, “"Besides fiscal incentives, we will improve import control efforts by implementing non-tariff barrier policies, limit imports of certain commodities and optimize anti-dumping and safeguarding measures”.

Data made available to fibre2fashion indicates that the textile industry has invested around $100 million in 2012, to modernize their outdated machineries, which in many cases are even two decades old.  

Speaking about modernization plans, Mr Sudrajat reveals, “More than 300 companies have modernized their machinery since the program was launched in 2007. Machineries are more than 20 years old and need to be changed urgently to retain competitiveness”.

Fibre2fashion News Desk - India