Sales and exports of Indonesia’s textile products are expected to remain sluggish in the second half of the year. The textile industry started to slow down in 2014 following a decline in global oil prices and an increase in gas and electricity rates in January this year. Imported products, particularly from China, have crushed the market share of local textile products. In the first half of this year, domestic industry’s market share reached 30 per cent but is expected to decline to 16.6 per cent in the second half.

Many businesses choose to be traders by importing products from China. Another competitor is Vietnam. Indonesian textile products cannot compete with Vietnamese products pricewise. Indonesia’s electricity costs are higher than Vietnam, which affects production costs. Indonesian textiles are charged an import duty of 11 to 30 per cent while entering the US market. Free trade agreements with the European Union and the US can help boost exports three times.

The industry has urged the government to lower electricity rates and help domestic players compete with foreign-made products. Indonesia has set an export target of $12.7 billion this year, the same as last year.