The textile and apparel industry in Indonesia wants downstream products to be protected from the onslaught of imports. Other aspects that need improvement include electricity tariffs, ease of distribution and quality of human resources. For Indonesia, trade agreements with partner countries can increase both export value and market share.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) which expected to be ratified in November 2018 could have an impact on increasing the market share of apparel exports to Australia. Indonesia is also looking to complete trade agreements with key partners such as the United States and the European Union, which are the main destinations for Indonesia’s textile exports. With such agreements in place Indonesia expects its exports of textile and textile products to increase three-fold.
The cooperation agreement with Japan has helped increase Indonesia’s exports. Till now, lack of market access has been a constraint for the textile industry. Meanwhile, textile products from neighboring countries, such as Vietnam, can enter with a zero per cent import duty. At present, the market share of new domestic textile products is around 1.8 per cent while in Indonesia the textile industry has been integrated from upstream to downstream so that the potential for development is still large.