Indonesia Plans Textile Sector Revamp, Targets Major Export Growth
Indonesia is preparing a major overhaul of its textile industry, with the government focusing on strengthening the midstream segment to improve integration across the value chain and boost exports.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the country aims to “reborn” the textile sector by reinforcing fabric production, yarn manufacturing, printing, dyeing and finishing, areas that have historically been weakly connected with upstream operations.
The initiative follows directives from President Prabowo Subianto, under which the government plans to establish a new state-owned enterprise (SOE) dedicated to textiles. The proposed entity is expected to play a key role in modernising the sector and enhancing competitiveness.
As part of the plan, investment fund BPI Danantara will allocate about $6 billion toward the new SOE. The funds will be used for procurement of capital goods, adoption of advanced technologies, and measures to strengthen textile exports.
The government has also completed preliminary studies and will now prepare a comprehensive roadmap to strengthen the textile and textile products (TPT) industry. The strategy aims to increase exports from around $4 billion to $40 billion over the next decade, supported by rising global demand and deeper integration across the supply chain.
Officials also view the textile and garment sector as a strategic industry in managing potential risks arising from U.S. tariff policies, while emerging opportunities in global markets could support growth. Airlangga noted that tariff reductions in Europe expected in the coming years could further expand market access for Indonesian exporters.
The government believes that textiles, particularly in the fashion and lifestyle segments, will remain a high-growth industry and a key contributor to employment, exports and industrial development.
