Indonesia's Shoe Industry Accelerates as US Faces Pressure from Two Nations
The leather, leather goods, and footwear industry recorded growth of 11.30% in Q2 2026. This figure represents the highest growth in the last 15 quarters and partly reflects a rebound in export demand.
However, behind this growth, the national footwear industry still faces a number of pressures, ranging from geopolitical uncertainty, rising raw material prices, trade policies of export destination countries, to United States (US) tariffs.
Secretary General of the Indonesian Footwear Association (Aprisindo) Yoseph Billie Dosiwoda acknowledged that the industry growth recorded in Statistics Indonesia (BPS) data indicates an expansion phase.
“It is true that the macro data from BPS shows a fairly significant improvement. The growth of the leather, leather goods, and footwear industry reaching 11.30% in Q2 2026 is the highest in the last 15 quarters. This shows that from a statistical perspective, this sector is experiencing an expansion phase,” Billie told CNBC Indonesia on Tuesday (11/8/2026).
“But we cannot be complacent without safeguarding it so that there is no future increase, because the footwear industry will become a potential if the industrial climate for export-oriented footwear industry players is kept conducive, and mandatory government regulations do not become new obstacles in carrying out productivity,” he continued.
Billie assessed that the current growth does not yet mean the industry has fully recovered. According to him, the rebound in export demand and global cycle adjustments are among the factors driving growth.
“However, if we look at the real conditions on the ground, the picture is more complex. The growth more reflects a rebound in export demand and global cycle adjustments, not that all industry players have recovered evenly. Currently, the footwear industry is still in a wait-and-see phase, especially due to external and domestic pressures that remain quite significant,” he said.
Billie said that export-oriented footwear industry players still face a number of obstacles. One of them is global geopolitical uncertainty that impacts supply chains and raw material costs.
“Even in some cases, rising up to 30%-40%,” he said.
Secondly, the unresolved VAT restitution tax issue, and tariff pressures, as well as trade policies of destination countries, including the United States (US) tariff scheme which is still in the range of 10%. According to him, these tariffs pose a new challenge for Indonesian footwear exporters in competing with other producing countries, such as India and Cambodia.
“The same tariff as India and Cambodia will be a new challenge going forward, with competing countries to increase exports,” said Billie.
On the other hand, opportunities for market expansion to Europe are open through the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). If 0% tariff access can be realised in early 2027, the policy is considered capable of opening new markets for Indonesian footwear products.
Nevertheless, Billie said the industry’s challenges do not only come from the export market. The domestic market also faces pressure due to the influx of imported products.