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Indonesia increases import duty

Indonesia recently hiked import duty on a wide range of manufactured goods. This, the government hopes, will boost the domestic industry given the current economic slowdown. Business groups are elated with this decision. The Indonesian Textile Association (API) chairman, Ade Sudrajat, has stated that a rise in tariff would benefit domestic manufacturing, which would allow fairer competition between locally made and foreign goods.

 

 

The effort is to try and harmonise tariffs by imposing higher duties on finished goods and less on raw materials and intermediate goods. The textiles industry faces a great amount of production costs. These are due to higher energy costs and labour wages, which in turn, hamper competition with cheaper exports. Manufacturers in the textile industry have felt the impact of higher costs and weak demand too.

 

In the first quarter, textile industry cut down production by 20 per cent. Throughout the second quarter, it maintained low output, decreasing factory utilisation. Experts feel the duty rise would help revise the inharmonious tariff system. It could even be advantageous to the local industry by pushing up sales and encouraging production, consequently, lowering costs.

 

 

 

 

 

 

 
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