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Indonesia revitalising textile sector
Apr '17
With exports of textile and textile products rising in Indonesia, the Government there is trying to revitalise the sector by introducing new machines and equipment and issuing economic policy packages. There are also plans for a special regulation on fiscal incentives in the form of fiscal allowance for export oriented labour intensive industry. 
Industrialists would have income tax discounts for business expansion under the incentives planned, an Indonesian news agency report said.
Indonesia's exports of textile and textile products (TPT) were valued at $2 billion in the first two months of 2017, three per cent higher than those in the same period last year, the report said.
"TPT industry is a labour industry providing jobs for around three million people that it could serve as a social safety net," industry minister Airlangga Hartarto said in a statement. In 2016 investment in TPT industry was worth Rp 7.54 trillion with exports valued at $11.87 billion employing 17.03 per cent of workers in the manufacturing sector. 
The minister said he was optimistic that the country's TPT industry could compete globally especially as the industry had been integrated from upstream to downstream sectors. However, the industry needed revitalisation as the majority of factories used old machines especially weaving and knitting factories. The machines needed replacement.
"Revitalisation, we have begun by using new machines and equipment which has shown positive results, but the programme has to be continued," he said. 
In addition, economic policy packages already issued by the government should be utilised by TPT industrialists by increasing investment, otherwise, in five years, the country's TPT industry would find it more difficult to face competition from countries like India, China, Vietnam and Bangladesh, he said. 
The industry ministry was preparing a special regulation on fiscal incentives in the form of fiscal allowance for export oriented labour intensive industry under which industrialists would have income tax discount for business expansion. The ministry was also seeking comprehensive cooperation agreement with Europe and the United States for benefits such as better tax facility, he said and added small industries would also be facilitated to boost exports. 
Director General of chemical, textile and multifarious industries Achmad Sigit Dwiwahjono said imports of cloth were also a challenge hampering investment in TPT industry. The industry ministry was teaming up with the trade ministry to curb textile imports to protect the country's TPT industry. (SV)

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