Ministry of Cooperatives and SMEs: 50 Percent of Textile Imports from China Not Recorded as Entering Indonesia

JAKARTA - The Ministry of Cooperatives and SMEs (Kemenkop UKM) said that 50 percent of Chinese textile and textile product (TPT) imports were not recorded entering Indonesia. This is due to the gap between the value of China's exports to Indonesia and Indonesia's import data from China.

Acting Deputy for SMEs at the Kemenkop UKM Temmy Setya Permana said that this was based on data that had been processed by the Kemenkop UKM, the Indonesian Textile Association (API) and the Indonesian Filament Fiber and Yarn Producers Association (APSyFI).

The value of Chinese textile products to Indonesia reached IDR 29.5 trillion referring to data in 2022. Then in 2021, the value of unrecorded Chinese textiles to Indonesia was IDR 29.7 trillion.

Meanwhile, China's export data to Indonesia is almost three times greater than the value of Indonesia's imports from China. Thus, there is a large difference in HS code numbers 61-63.

"There is 50 percent of the import value that is not recorded. This means that the export figures entering China are not balanced with our import figures. This means that we suspect that there are products that enter illegally," said Temmy in a media discussion at the Kemenkop UKM office, Jakarta, Tuesday, August 6.

Temmy said that the impact of illegal imports as a whole could result in a loss of potential workforce absorption of 67,000 with a total employee income of IDR 2 trillion per year.

"The large number of goods entering without recorded import duties and others, this makes the price very cheap and is forced to distort prices in the market," he said.

With this, the Ministry of Cooperatives and SMEs also recommends a policy of imposing a Safeguard Import Duty (BMTP) of 200 percent only for products that are consumed at the end or on HS codes 58-65.

"So, 200 percent is okay, but we suggest to be careful with the final product, not the industrial raw materials. So, the industry continues to grow. But, our limit is final consumer goods (such as) bags, cosmetics and clothing," he said. In addition, the Ministry of Cooperatives and SMEs also supports the proposal of the Coordinating Ministry for the Economy regarding incentives for restructuring machinery in the form of exemption from import duties on machinery.