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Strong dollar raises hopes for Indonesia’s textile exports

Indonesia hopes to increase textile exports with the strengthening of the dollar against the rupiah. The textile sector is the third biggest foreign exchange earner for Indonesia. Palm oil industry is first followed by tourism. Textile and textile products industry is a strategic manufacturing sector in the Indonesian economy. The country’s foreign exchange earnings from textile exports are more than $3 dollars annually. Indonesia’s textile production was up eight per cent from January to March 2018.

The increase was triggered by domestic demand and tightening of wholesale and other imports. Indonesia hopes to triple textile and textile product exports in the next five years. If this happens, this sector will be Indonesia’s largest non-oil export contributor and create jobs for six million people.

The industry now wants an integrated cluster and close to the source of raw materials; a tightening of textile imports; affordable factory rental rates; upstream and downstream industries integrated in one region. In 2016, apparel exports decreased 3.2 per cent due to several challenges including high logistics costs and gas and power tariffs being higher than other competitor countries.