JAKARTA (TheInsiderStories) – To protect local producers from a surge imports of fabric, yarn, and curtains, Indonesian government has imposed new tariffs since May until November 2022, finance ministry announced today (05/28). The policy regulates in ministerial decree Number 56 of 2020.
A number of countries are exempted from the measures, like synthetic yarn and curtains imports from Hong Kong and South Korea also fabrics for India and Vietnam. The regulation said, during May 27 – Nov. 8, 2020, the safeguard duties set Rp1,405 (US$0.93) per kilogram. Then Nov. 9, 2020 to Nov. 8, 2021 lowers to 1,193 a kilogram and Rp979 per kilogram since Nov. 9, 2021 until Nov. 8, 2022.
Last year, Indonesian government has imposed temporary additional duties on imports of textiles and textile products up to 67.70 percent to protect the domestic upstream industry from a surge in imports and encourage the use of domestic market products.
Through regulation Number 161 of 2019, the ministry has determined temporary additional duties for yarn products – other than sewing thread – from imported synthetic and artificial staples starting from Rp1,405 a kilogram. The rule Number 162/2019, the ministry has also set temporary additional duties for imported fabric products ranging from Rp1,318 to Rp9,521 a meter and ad valorem rates ranging from 36.30 percent to 67.70 percent.
Then, in ministerial decree Number 163/2019, the ministry imposed temporary additional duties on curtains products, blinds, bed nets, and other furniture items imported at Rp41,083 a kilogram.
Moody’s Investors Service has warned that the United States (US) – China trade dispute could lead to an influx of Chinese yarn, fabric, and garments into Indonesia. It said, potentially disrupting the so far stable levels of demand and supply in Indonesia by pushing up supply, which would, in turn, depress prices and hurt local manufacturers. The tariffs imposed by US on Chinese textile exports are at 25 percent versus the 10 – 15 percent that Indonesia has implemented.
“The Indonesian textile companies that we rate are not immune to the dumping of Chinese textile products in Indonesia, should it occur,” says Stephanie Cheong, a Moody’s Analyst in a report.
Moody’s points out that while there are fears that Chinese companies will redirect their textile products to Southeast Asia, including Indonesia, initial trade data estimates published by Bank Indonesia for the six months between January and June 2019 show that the year-over-year value of imports and exports has broadly held steady.
Based on trade ministry data, imports of textile fabrics rose by 74 percent and other textile products, such as some types of synthetic yarn doubled during 2016 – 2018. The country imported 413,813 tones of fabrics in 2018.
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