The Ministry of Industry pointed out that the Indonesian Synthetic Filament Yarn Association, on one hand, demands the government strengthen import restrictions to protect the domestic industry, while on the other hand, it condones its member companies significantly increasing raw material imports, creating policy arbitrage. From 2024 to 2025, the total import volume of yarn and fabric by association members surged from 14.07 million kg to 47.88 million kg, an increase of 239%. Fifteen companies utilizing bonded zone policies circumvented scrutiny through General Import Licenses. In fact, tariff protection for polyester staple fiber extends until 2027, for synthetic fiber yarn until 2025, and for fabric until 2027.
Only 15 out of 20 member companies submitted industrial activity reports as required, with 5 large companies long absent from supervision; companies enjoyed tariff protection and import facilitation but did not invest in technology upgrades or new investments; if a 45% anti-dumping duty were imposed as demanded by the association, it would lead to 40,000 job losses downstream.
The Ministry of Industry emphasized it would maintain a balanced strategy, replacing imports upstream through tariffs while ensuring import facilitation of raw materials to maintain the international competitiveness of downstream export-oriented enterprises. The textile industry still maintained 4% growth in the first half of 2025, and the Ministry called on the association to stop misleading public opinion and shift to compliant collaboration. This controversy reflects the structural contradiction in Indonesia's manufacturing sector, namely the conflict between upstream protectionism and downstream globalization demands.
The Ministry of Industry pointed out that the Indonesian Synthetic Filament Yarn Association, on one hand, demands the government strengthen import restrictions to protect the domestic industry, while on the other hand, it condones its member companies significantly increasing raw material imports, creating policy arbitrage. From 2024 to 2025, the total import volume of yarn and fabric by association members surged from 14.07 million kg to 47.88 million kg, an increase of 239%. Fifteen companies utilizing bonded zone policies circumvented scrutiny through General Import Licenses. In fact, tariff protection for polyester staple fiber extends until 2027, for synthetic fiber yarn until 2025, and for fabric until 2027.
Only 15 out of 20 member companies submitted industrial activity reports as required, with 5 large companies long absent from supervision; companies enjoyed tariff protection and import facilitation but did not invest in technology upgrades or new investments; if a 45% anti-dumping duty were imposed as demanded by the association, it would lead to 40,000 job losses downstream.
The Ministry of Industry emphasized it would maintain a balanced strategy, replacing imports upstream through tariffs while ensuring import facilitation of raw materials to maintain the international competitiveness of downstream export-oriented enterprises. The textile industry still maintained 4% growth in the first half of 2025, and the Ministry called on the association to stop misleading public opinion and shift to compliant collaboration. This controversy reflects the structural contradiction in Indonesia's manufacturing sector, namely the conflict between upstream protectionism and downstream globalization demands.