Coordinating Minister for Economic Affairs Airlangga Hartarto announced on 14 January that the government plans to revive a state-owned enterprise in the textile sector. The announcement followed discussions with President Prabowo Subianto and other ministers in Bogor, West Java.
"Indonesia once had a textile SOE, and this will be revived with $6bn in funding to be prepared by Danantara Indonesia," Airlangga said during an Indonesian Business Council meeting in Jakarta.
The initiative aims to support the textile industry, which employs large numbers of workers and contributes substantially to national exports, according to local news publication Jakarta Globe ID. The government also intends to address issues affecting related sectors such as footwear and garments.
Airlangga noted the sector faces increasing challenges, including tariffs imposed by the US, an important market for Indonesian textile and footwear products. The new SOE is expected to strengthen production capacity and increase Indonesia's competitiveness in overseas markets.
To further support the industry, authorities are preparing policy measures such as expanding market access through trade cooperation with the European Union under the Comprehensive Economic Partnership Agreement. With these steps, Indonesia is targeting national textile exports to reach $40bn within the next few years.
Textiles and apparel remain important employers in Indonesia, particularly in areas like Central Java, West Java, and Banten. The sectors are dominated by semi-skilled and low-to-middle income workers who have limited alternative opportunities outside manufacturing.
Fluctuations in these industries frequently lead to social and economic impacts, including job losses, factory closures and growth in informal employment.
Earlier this month, local news reports indicated that Indonesia had introduced safeguard duties on cotton woven fabrics starting from 10 January to support its domestic textile sector. The government signed the policy on 22 December, aiming to apply these measures when rising imports are seen as a potential threat to local producers.