Textile exports contributed 1.21 per cent to Indonesia’s gross domestic product in 2015. Indonesia is one of the world’s largest textile producers. There are currently around three million Indonesians working in the textile industry. The country is part of the Asean. So, goods - including textile and textile products – are flowing freely within member countries in the region. This means there is a continuously rising flow of imported textile products into Indonesia.

However, Indonesian textile players say that many textiles that are supposed to be coming from other Asean countries are actually originating from non-Asean countries. These imports of relatively cheap textile products are putting pressure on Indonesia’s domestic textile manufacturing industry, an industry that is already under pressure. Since the launch of the Asean China free trade agreement in 2010, the Indonesian market has seen a great surge in cheap textile imports from China.

Meanwhile, Indonesian textile manufacturers have difficulty competing on a global scale as local gas prices are high, while the industry is highly dependent on imports of raw materials from abroad, which cause high production costs. In 2015 Indonesia imported textiles worth millions of dollars from Thailand, Vietnam and Singapore. Especially Singapore is a source of transshipments of textile products that are manufactured outside the Asean region.