Indonesia renews textile import duties to curb Chinese goods

Indonesia reimposed additional tariffs on imports of fabrics to protect the local industry from the flood of cheaper goods coming mostly from China. 

The so-called safeguard duties take effect on Aug. 9 and are valid for three years, according to the Finance Ministry rule issued on Tuesday. They apply to five types of fabrics imported from 124 countries, it said. Imports from China, Hong Kong and South Korea are charged on their entire range of fabrics.

The initial tariff policy ended in 2022 and was reintroduced in response to complaints from the local textile industry who suffered from cheap imports. Indonesia’s biggest publicly traded clothing company PT Sri Rejeki Isman defaulted on debt payments and was forced to restructure $1.4 billion in loans. 

Similar tariffs are also imposed on carpet imports starting from Aug. 20 for a period of three years. Products from Vietnam and Thailand, previously exempted from these duties, will be among those affected by the new rule. 

The highest rate on imported fabrics was reduced to 10,261 rupiah ($0.63) per meter for the first year. Under the previous rule, the maximum tariff was 10,635 rupiah per meter.

For carpets, the import duty for the first year was lowered to 74,461 rupiah per square meter from 85,679 rupiah per square meter previously. Both tariffs will decline in subsequent years.

Besides textiles, authorities are also investigating imports of other products that could be subject to similar policy.