Indonesia’s textile exports are facing challenges. A wave of layoffs is threatening the textile and textile product industry in the country.

The lay offs began in the garment industry then spread to fabrics upstream. Cancelled orders from buyers in the US and the European Union have made things worse. Moreover countries that have cold winters will usually prioritize energy spending. With energy costs soaring up to four times, this would add to the challenges for Indonesia’s textile exports.

Around 70 per cent of Indonesia’s exports are to the US and the EU. The rest is to Japan, Turkey, Africa and China. Conditions in these countries are also not too good. Starting from the garment industry to fabrics, even the fiber industry has started to decrease production. The industry in Indonesia wants action against imports that come in without paying taxes. This way, the textile industry in the country hopes to freely cater to domestic consumption even though exports are disrupted.

Indonesia’s earnings from exports of leather, finished leather goods, and footwear increased by 41 per cent in June 2022 compared to the same period in the previous year. There has been a diversion of orders from several global brands to Indonesia.