JAKARTA, TheKabarNews.com—President Prabowo Subianto has directed his cabinet to review trade, tax and financing policies for Indonesia’s textile and textile products industry. He aims to protect about four million jobs and improve the sector’s competitiveness.

Prabowo issued the instructions during a limited cabinet meeting at the Presidential Palace in Jakarta on Tuesday, September 22.

The meeting addressed raw-material access, disruptive imports and the restructuring of financially troubled companies.

Coordinating Economic Minister Airlangga Hartarto said the textile and textile products sector accounts for about 0.97 percent of Indonesia’s gross domestic product. Additionally, it generates approximately US$12 billion in exports.

He reported growth of 5.6 percent in textiles and clothing, while the leather and footwear industry expanded by 8.25 percent.

The figures underline the industry’s economic importance, but they also show contrasting trade conditions along its supply chain.

Airlangga said Indonesia imported US$8.4 billion in textile raw materials last year while exporting US$3.1 billion. Finished-garment exports, by contrast, reached US$8.7 billion, compared with imports of about US$690 million.

To address that imbalance, Prabowo asked officials to reassess technical import approvals. He also wants to harmonize tariffs between upstream producers and downstream manufacturers.

The review seeks to give garment producers reliable access to inputs without weakening domestic textile suppliers.

“The President asked us to review the technical approvals and other related regulations,” Airlangga said.

Prabowo also instructed the Customs and Excise Directorate General to curb illegal or improperly documented imports of used clothing and garments in bulk.

Airlangga said such shipments had disrupted domestic clothing manufacturers.

“Disruptions from secondhand clothing imports or bulk shipments must be addressed immediately because they seriously affect domestic garment producers,” he said in the Presidential Secretariat official.

The government will also examine employment and taxation rules. Ministers discussed fixed-term employment agreements (PKWT), which manufacturers use to respond to seasonal export orders.

Prabowo asked officials to develop suitable regulations for those arrangements. In addition, he directed the Finance Ministry to evaluate value-added tax treatment for export-oriented textile and garment businesses.

However, the government has not yet announced a final tax adjustment, tariff schedule or implementation date. The meeting produced policy instructions that relevant ministries must translate into regulations.

Financing formed another part of the discussion. Prabowo asked sovereign investment body Danantara to assist companies undergoing financial restructuring. He also rejected the view that textiles constitute a declining or “sunset” industry.

“The President stated that the textile industry should not be categorized as a sunset industry,” Airlangga said.

He added that the position should support reinvestment and additional working capital.

Danantara chief Rosan Roeslani said state-owned and private banks could help finance the replacement of aging factory machinery. However, officials did not identify which companies might receive assistance or specify the funding mechanism.

The policy review comes as Indonesia’s wider manufacturing sector remains in expansion. Statistics Indonesia (BPS) recorded a manufacturing business conditions index of 52.31 in the second quarter of 2026. However, its employment component remained in contraction.

The BPS indicator reinforces the government’s challenge: turning production growth into sustained investment and secure employment.