Minister issues decree to limit textile imports

Minister issues decree to limit textile imports

Adianto P. Simamora, The Jakarta Post, Jakarta

The Ministry of Industry and Trade has issued a decree to
limit textile imports in a bid to help the local industry, which
has been severely hurt by massive quantities of cheap imports.

Decree No. 732/2002, which was signed by minister Rini MS
Soewandi on Tuesday, stipulates that the importation of textile
products can only be done by local textile producers.

Textile imports can only be used as raw material or
supplements for the production process of the importers-producers
and may not be sold or transferred to others, the decree states.

The decree says that the new regulation was necessary "to
prevent the sale of illegally imported textiles, which has
created unfair trading and inflicted losses on local textile
producers."

The decree came following repeated complaints by local
producers over the massive quantity of cheap imported textiles,
mostly from China, available on the local market.

They said that uncontrolled textile imports had added to the
misery of local textile producers, which have been struggling to
cope with rising manufacturing costs.

The decree also states that all authorized importers must seek
approval from the ministry for the amount and the time schedule
of their imports.

Importers must also report to the ministry about the
realization of their monthly imports.

The government will revoke their import licenses if authorized
importers fail to submit monthly reports, according to the
decree.

The Indonesian Textile Association (API) chairman, Lili
Asdjudiredja, welcomed the decree, saying it could help curb the
smuggling of textile products and protect local producers against
smuggled imported products.

"This is very good news for us. Our local products have been
seriously threatened by smuggling activities. With the new decree
we can now control the inflow of textiles into the local market,"
Lili said.

Indonesia booked a record textile export value of US$8.2
billion in 2000, but the export value slipped to $7.6 billion
last year.

There are also fears that many foreign buyers will be
reluctant to buy Indonesian textiles, and shift orders to other
countries, if they are dissatisfied with the probe by Indonesia
into the bomb attack in Bali more than two weeks ago.

In light of the fears, several days after the Bali bombing,
Rini made an official request for the Ministry of Finance to
raise import duties on garments to up to 40 percent to limit
imports so that local producers had a better opportunity to sell
their products on the local market.

Import duties on garments currently range from between 15
percent to 25 percent,

Rini has also asked the police to intensify operations to
crack down on the rampant smuggling of garments into the country.