NEWS & CSR

Low-Cost Chinese Textile Imports Threaten Indonesia’s Local Industry

12 Nov 2025 | News Category: -

If you visit textile hubs like Bandung or Solo today, the once-loud hum of spinning machines has grown faint. One by one, factories are reducing their production capacity, and some have even shut down completely—unable to compete with the flood of cheap imported goods.
At the same time, our markets and online shops are filled with extremely low-priced clothing, most of which comes from China.

Cheap prices may be tempting, but behind them lies a much bigger issue: Indonesia’s textile industry is running out of breath. As stated by Purbaya Yudhi Sadewa, Minister and member of the Financial System Stability Committee (KSSK),

“The ones who profit are the importers—but the industry dies.”

His statement reflects the harsh reality on the ground. As textile and apparel imports continue to surge, local producers are slowly being pushed out of their own market.

Chinese Textiles and the Unequal Playing Field

Massive Scale and Ultra-Low Prices

China is the world’s largest textile producer. With advanced technology, low production costs, and a highly efficient supply chain, Chinese manufacturers can produce in massive quantities and sell at prices far below market average.

According to Kontan.co.id, the surge of cheap textile imports from China has driven down local factory utilization rates to only around 60% of national capacity.
As a result, domestic products struggle to compete on price.

For consumers, imported clothing may seem like a rational choice. But for local textile businesses—from major factories to small garment workshops—this situation has become a heavy burden that could quietly shut them down.

Read also: Global Textile Trends 2025–2030 — Sustainability, Digitalization, and the Future of the Industry

The Real Impact on Indonesia’s Textile Sector

Thousands of Workers Losing Their Livelihoods

The textile industry is labor-intensive and has long provided jobs for millions of Indonesians. However, according to data from the Indonesian Textile Association (API), more than 30,000 workers have been laid off since early 2024 due to falling domestic demand and the rise of cheap imports.

Small Businesses and Upstream Industries Suffer

The ripple effect is massive. As large factories lose orders, smaller players—such as fabric makers, weavers, thread suppliers, and accessory producers—also take the hit.
This is especially worrying because many of these small businesses are the backbone of Indonesia’s cultural creativity, producing batik, woven fabrics, and traditional motifs that reflect our national pride.

Used Clothing Imports Add to the Problem

Beyond new products, imported second-hand clothing (thrifting) has become another challenge for the industry. Although popular for its low price and “vintage” appeal, this practice harms local producers and violates import regulations.

According to CNA Indonesia, President Prabowo Subianto reaffirmed that the ban on used clothing imports will remain in effect to protect Indonesia’s textile producers. This aligns with Minister Purbaya Yudhi Sadewa’s stance that the trade in second-hand imports “only benefits a few, while the national industry slowly dies.”

However, as reported by Indotextiles.com, enforcement remains a challenge. Many imported used clothes still enter the country through unofficial routes, directly competing with local products in markets across Indonesia.

Root Causes: Weak Regulation and Low Efficiency

Local Production Still Lacks Competitiveness

We understand that many local textile players continue to face efficiency challenges. Much of the machinery used is decades old and not fully automated. Electricity and raw material costs remain high—ironically, many raw materials are still imported from China itself.

This makes it nearly impossible for local products to match the prices of imported ones. Here lies the dilemma: without modernization, competitiveness cannot improve; yet without protection, there’s little room to recover.

Import Regulation Still Lacks Firm Enforcement

Reports have also revealed ongoing undervaluation practices, where imported textiles are declared at prices far below their actual value to avoid import duties. Unless customs supervision and distribution channel monitoring are strengthened, the flood of cheap Chinese textiles will continue to dominate Indonesia’s domestic market.

The Way Forward: Protect, Modernize, and Support Local

Cheap imports may look attractive, but behind those low prices lie serious long-term consequences for the future of Indonesia’s textile sector.
As Minister Purbaya Yudhi Sadewa warned, if imports remain uncontrolled,

“The industry will die slowly.”

We believe there’s still a way forward. With stronger policies, modernization, and your support as a consumer, Indonesia’s textile industry can rise again—competitive, innovative, and proud of its local craftsmanship.

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