Indonesia has been witnessing a continuous increase in exports of textile and textile products in recent times. As a result, the Government is trying to revitalize the textile industry by introducing new machines and equipment and also issuing economic policy packages. Additionally, there are plans for a special regulation on incentives in the form of fiscal allowance for the export-oriented and labour-intensive industry. Notably, under the incentive schemes planned, industrialists would also get income tax discounts for expanding their business
According to Indonesian news agency’s report, the country’s exports of textile and textile products (TPT) were valued at US $ 2 billion in the first two months of 2017 – 3 per cent higher than those in the same period in the year 2016. “TPT industry is a labour industry, providing jobs to around 3 million people,” averred Airlangga Hartarto, Industry Minister of Indonesia, who is optimistic that the country’s textile industry could compete globally but importantly it needs revitalization as the majority of factories, chiefly weaving and knitting factories, use old machines. “We have begun revitalization by using new machines and equipment which has shown positive results, but the programme has to be continued,” said Hartarto.
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However, the Minister added that if the TPT industrialists do not utilize the economic policy packages issued by the Government by increasing investment, then the TPT industry may lose the competition to countries like India, China, Vietnam and Bangladesh in next five years.
The Ministry is also seeking cooperation agreement with Europe and US for tax benefits. Also, small industries would also be facilitated to boost exports. The Industry Ministry is also teaming up with the Trade Ministry to curb textile imports to protect the country’s textile business.
