- Loose regulation of textiles and textile products is believed to be a primary cause of the currently poor condition of Indonesia's domestic textile industry. In the search for causes, Esther Sri Astuti, Program Director at the Institute for the Development of Economics and Finance (Indef), has pointed the finger at Regulation of the Minister of Trade (“Minister”) No. 64/M-DAG/PER/8/2017 on the Amendment to Regulation of the Minister No. 85/M-DAG/PER/10/2015 (“Regulation 85/2015”).
- In response to the current climate in the domestic textile industry, the Minister recently issued Regulation No. 77 of 2019 on the Second Amendment to Regulation 85/2015 (“Regulation 77/2019”). However, according to Ms. Astuti, this new regulation may not prove adequate to turn the domestic textile industry around, primarily due to the fact that there is still little transparency regarding import quotas under the new framework. Ms. Astuti has also drawn attention to the fact that Regulation 77/2019 sets no restrictions on businesses operating within Central Bonded Logistics (Pusat Logistik Berikat - “PLB”) zones, pointing out that fraudulent practices relating to the import of textiles and textile products are widespread in PLB zones.
- In light of these criticisms, the Minister is being urged to formulate a further revision of Regulation 85/2015. It is hoped that such a revision will stand a greater chance of improving conditions within the country’s domestic textile industry.
- For more on this story, see: “Regulasi Longgar, Industri Tekstil Domestik ‘Sekarat’”.
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