For the first quarter, Indonesian exports of non-knitted clothing declined by 2.9 per cent while shipment of knitted goods dropped by 4.9 per cent. Indonesia is preparing to start talks on the long-delayed comprehensive economic partnership agreement with the EU, which is expected to boost the competitiveness of its products to the 28-member bloc.

Without free trade deals, Indonesian textile and garment producers are currently being charged duties ranging from 11 to 30 per cent to main export destinations, including the EU and US. The trade arrangement may push down levies to as low as zero per cent, resulting in an enhanced edge of traded goods in terms of price.

Indonesia has seen its share decline in textile trading with major partners from 2007 to 2013. New challenges have been faced in recent years, including automatic electricity-price adjustments. Power prices fluctuate each month depending on the rupiah exchange rate, crude oil price and inflation.

Depreciation of the local currency against the dollar has been pushing up electricity rates, which contributes between 18 per cent and 26 per cent to costs in the textile and garment industry. Indonesia’s main destinations of textile and textile products are the US, Japan, Turkey, Germany and South Korea.