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APSyFI: The national textile industry is headed for a trade deficit, 2018 exports grow 1% and imports grow 14% (yoy).--IKATSI: The growth of the national textile industry is still hampered by floods of imports, Indonesia needs a clothing security law.


	
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Home arrow Latest News arrow Textile Association Hope Government to Fix Business Ecosystems


				
			
			
Textile Association Hope Government to Fix Business Ecosystems PDF Print E-mail
Written by Maizer   
Tuesday, 17 September 2019

The Indonesian Textile Association (API) and the Indonesian Association of Synthesis Fiber and Filament Yarn (APSyFI) demand the government to improve the business ecosystem.

 

"The ecosystem of the textile industry and textile products does need a comprehensive overhaul. For example, it is easy for investors to build new businesses in Indonesia," said API Chairman Ade Sudrajat in Jakarta.

 

At present, continued Ade, there are still too many licenses that must be taken care of by investors when opening their business in Indonesia. In fact, he explained, recommendations from the authorities up to the village head's decision were made a permit.

 

"Even the Perpres is very weak compared to the Decree of the Village Head. The Kepdes are more powerful because they are waiting for the same headman in front of the factory," said Ade.

 

The association also requested that the improvement of the ecosystem be done through harmonization of tariffs from upstream to downstream. The reason, domestic textile and textile product producers are objecting to the Value Added Tax (VAT) and import duties for TPT products from local materials that can touch 15 percent. This is different from imported raw materials that are subject to a zero percent import duty because there is a policy on the Importability of Export Purpose (KITE).

 

"For finished fabrics and garments are zero percent, while upstream there is a 50 percent import duty, even coupled with 9 percent anti-dumping, there can be 15, there are 20, various kinds," said Ade.

 

In principle, said Ade, business operators ask for a similar tariff treatment between imported raw materials and local raw materials. Ade even said, if there is an Ease of Import for Export Purposes, then a Local Easiness for Export Destinations must also be made. The government, said Ade, must side with producers who truly utilize local raw materials.

 

"The proposed harmonization of tariffs from the Ministry of Industry is, strictly speaking, fiber and fiber for example can be zero percent. Below are 5 percent. Fabrics are 8 percent, garment is 12 percent, everything is like a pyramid," he said.

 

Business practitioners also demanded a safeguard that could protect domestic textile and textile products from the onslaught of imported products, especially from China. "Safeguards from upstream to downstream with the amount of import duty that ensures we are not flooded with imported goods," said APSyFI Chairman Redma Gita Wiraswasta.

 

Furthermore, Redma explained, if the proposed safeguard amount was only 0-12 percent, it was certain that it would not be able to stem imported products, because the difference in prices of local goods with imports was already 30-40 percent, not to mention if imports were carried out under invoices or under declare volume, the price difference can be higher.

 

"So, it's useless if you do a safeguard if only 0-2 percent," he explained.

 

Redma requested that the amount of safeguard upstream be a minimum of 20 percent to replace the current anti-dumping. "It means, the downstream must be greater than that," said Redma.

 

 

 
		
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