The Indonesian government has reiterated its commitment to support the recovery of the textile and textile products (TPT) industry following the recession due to the coronavirus pandemic.
Indonesian Industry Minister Agus Gumiwang Kartasasmita said in a written statement on the 24th that the textile industry is one of the industries severely affected by the pandemic. Therefore, the government will provide support through fiscal and non-fiscal policies. “The government continues to support improving the investment and business environment by issuing a number of strategic policies in the form of fiscal and non-fiscal incentives to improve the performance of the textile industry,” he said.
Agus added that for example, fiscal policy incentives such as “tax benefits and tax holidays” were implemented, and the government also lowered the corporate income tax rate from 25% to 22%. Moreover, the Ministry of Industry also proposed to impose government-borne import tariffs (DTP) on imported raw materials for the textile industry; at the same time, from a non-fiscal policy perspective, Agus said that the government’s efforts are to develop commodity balance and verify the The industry’s ability to improve raw material supply chains and build material hubs by supporting the small and medium industries (IKM) sector.
The government then also tried to control imports and impose trade remedies on the textile industry as a measure to protect the domestic market. The steps it takes are by providing import advice, levying anti-dumping duties (BMAD) and security measures import duties (BMTP) or safeguard measures.
Agus pointed out that the implementation of Industry 4.0 in the textile and garment industry also includes machine and equipment restructuring plans, preparation of Industry 4.0 lighthouses, logistics improvement through the Indonesian Smart Textile Industry Hub (ISTIH) and preparation of the Integrated Garment Park Industrial Zone. At the same time, the government also released the Operational Mobility and Industrial Activities (IOMKI) policy to reduce gasoline prices, encourage the implementation of circular economy and sustainable development in the textile industry, and improve human resources (HR) capabilities.
In addition, the Indonesian government will continue to encourage the accelerated implementation of free trade agreements (FTAs) to expand the textile industry market. The Minister is optimistic that these schemes/policies of the government will stimulate textile industry companies to improve investment, performance and company productivity.
It is reported that the textile industry’s contribution to the manufacturing gross domestic product (GDP) in the third quarter of 2021 was 6.08%. At the same time, the quarter-on-quarter growth rate of the textile industry also increased to 4.27% from 0.48% in the second quarter of 2021.
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