The Indonesian textile and textile products (TPT) industry remained wary of imports even as it failed to make the best of the US-China trade war.

An ambitious plan to digitise the textile and textile products (TPT) industry, widespread concern over the rapid flow of imported goods reducing the competitiveness of the domestic manufacturing industry, demand for reforms and government tightening restrictions on textile imports as a result were the notable developments in Indonesia’s garment and textile sector in 2019. In the first three months of 2019, clothing production skyrocketed by 29 per cent on export orders, boosting the industry as a whole and contributing to a 4.5 per cent increase in overall production in that period.

Trade concerns

Despite Indonesia’s TPT sector hoping to be a beneficiary of the US-China trade war that has forced global firms to pivot production out of China, Indonesia fell behind due to red tape and other barriers. The country is lagging in terms of gains from trade diversion and from investments in the new supply chains despite its large labour force, competitive wages and ample land. Bureaucratic regulations, protective protective labour laws and high trade barriers seem to be big bottlenecks.

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