President Prabowo Directs Textile Industry Protection: Strengthening Raw Material Supply and Combating Illegal Imports

President Prabowo Subianto of Indonesia has issued directives to strengthen the protection of the domestic textile industry. These directives encompass ensuring a stable supply of raw materials necessary for the industry and intensifying the crackdown on illegal imports, particularly used clothing. Coordinating Minister for Economic Affairs Airlangga Hartarto revealed the details of the President's instructions. According to the minister, the President requested improvements to the challenges faced by domestic textile industry players, especially barriers in raw material procurement. Specifically, a review of procedures such as Technical Considerations (Pertek) related to raw material imports was ordered. Furthermore, halal certification for leather-based raw materials was mentioned, which is crucial not only for the textile industry but also for the footwear industry. Halal certification is an essential element for gaining consumer trust, considering Indonesia's large Muslim population. The Director General of Customs and Excise was also instructed to swiftly crack down on the illegal circulation of downstream products, especially used clothing imported in bulk or bales. These illegal imports pose a significant competitive hindrance to domestic garment manufacturers. Regarding taxation, the President showed a positive stance on considering tax relief for value-added tax (PPN) for contract workers (PKWT) employed only during specific production seasons. The plan is to explore appropriate regulations, as similar labor procurement is not taxed in some overseas cases. A review of PPN for export-oriented textile and garment companies was also proposed to the Ministry of Finance. Meanwhile, plans for establishing a state-owned textile company are also progressing. Rosan Roeslani, CEO of Danantara, expressed intentions to aim for operations in an integrated industrial zone, also considering partnerships with existing companies. This plan has been discussed since early 2026, but a specific timeline for realization remains undecided.