Indonesias exports of textile and textile products (TPT) were valued at US$2 billion in the first two months of this year or 3 percent higher than in the same period last year.
“TPT industry is a labor industry providing jobs for around 3 million people that it could serve as a social safety net,” Industry Minister Airlangga Hartarto said in a statement received here on Monday.
Airlangga said in 2016 investment in TPT industry was worth Rp7.54 trillion with exports valued at US$11.87 billion employing 17.03 percent of workers in the manufacturing sector.
The minister said he was optimistic the countrys TPT industry could compete well globally especially as the industry has been integrated from upstream to downstream sectors.
The minister, however, said the industry needs revitalization as the majority of factories now use old machines especially weaving and knitting factories. The machines need replacement as they are no longer efficient .
“Revitalization, we have begun by using new machines and equipment has shown positive result , but the program has to be continued,” he said.
In addition, economic policy packages already issued by the government should be utilized by TPT industrialists by increasing investment, otherwise, in five years, the countrys TPT industry would find it more difficult to face competition such as from India, China, Vietnam and Bangladesh, he said.
He said currently the Industry Ministry is preparing a special regulation on fiscal incentive in the form of fiscal allowance for export oriented labor intensive industry. Industrialists will have income tax discount to be used for business expansion, he added.
He said the Industry Ministry is seeking comprehensive cooperation agreement with Europe and the United States in the hope of benefit in the form of better tax facility.
He said small industries would also be facilitated to boost exports.
Director General of Chemical, Textile and Multifarious Industries Achmad Sigit Dwiwahjono said imports of cloth are also a challenge hampering investment in TPT industry. The Industry Ministry, therefore, is teaming up with the trade Ministry to curb textile imports to protect the country TPT industry.
In addition, the Industry Ministry encourages investment in the upstream sector to back up the domestic textile industry, Sigit said.