The Indonesian government has adopted a new tariff policy aimed to safeguard domestic cotton woven fabric producers in the face of increased imports.
According to a report from the Jakarta Globe ID, the policy—which was signed on Dec. 22—follows an investigation from the Indonesian Trade Safeguard Committee, which suggested that an increase in cotton woven fabric imports have begun impacting the nation’s domestic textile sector.
Known as the Bea Masuk Tindakan Pengmanan (BMTP) duty, the tariff will be applied on top of existing import duties, including preferred tariffs under international trade agreements and most-favored-nation rates. Imports from 122 World Trade Organization member developing countries such as Malaysia, Thailand, the Philippines, and nations in Africa and Latin America will be exempt from the duty.
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The policy will be applied for three years with a declining tariff each year. During the first year, rates will range from Rp3,000 ($0.18) to Rp3,300 per meter, based on tariff classification. The rate drops to Rp2,800-Rp3,100 per meter during the second year, and in the final year it will be Rp2,600-Rp2,900.
The textile and apparel industry is one of Indonesia’s largest manufacturing sectors, supported by a robust domestic market and a long-established value chain ranging from fiber production to finished garments. According to the nonprofit Business Indonesia, Indonesia’s textile and apparel gross domestic product grew 4.26 percent in 2024 after several years of volatility, with Purchasing Managers’ Index indicators reaching its highest level in nearly a year in November 2025.
Indonesia is a player in the global textile market, ranking 13th among textile-exporting countries with a 1.66 percent share of global textile exports, valued at $13.4 billion in 2023 according to the Observatory of Economic Complexity.
Yet, the country’s domestic demand for textiles continues to drive the industry, accounting for around 30 percent of production, according to Business Indonesia. The organization credits that demand to a combination of online retail, increased purchasing power in urban areas and Indonesia’s rapid adoption of new fashion trends.
The country’s large Muslim population—roughly 12 percent of the world’s Muslims, or around 240 million people, live in Indonesia, according to the Pew Research Center—also has helped boost domestic textile demand. Around 80 percent of Muslim apparel production in Indonesia is for domestic consumption, according to Business Indonesia.
While Indonesia will allow some exemptions for importers, those entities must submit a certificate of origin for cotton woven fabric imports from eligible countries. If origin requirements aren’t met, the imports will remain subject to the duty.
