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🇮🇩 Indonesia /Economy & Trade

Indonesia's Textile Industry Exports $4.85 Billion in First Half of 2026, Eyes Growth Through Incentives and EU Trade Deal

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Indonesia's textile and textile product (TPT) industry achieved US$4.85 billion in exports during the first half of 2026, employing 3.8 million workers.
  • The government plans to offer investment incentives, restructuring programs, and credit facilities to boost the sector's performance, alongside leveraging the Indonesia-European Union Comprehensive Economic Partnership Agreement.
  • Despite a 1.57 percent year-on-year export growth, the trade surplus narrowed to US$1.27 billion due to increased imports and rising raw material costs.

Indonesia's textile and textile product (TPT) industry generated US$4.85 billion in export value in the first half of 2026, a figure that underscores the sector's significant contribution to the national economy and employment, with 3.8 million workers currently engaged.

Minister of Industry Agus Gumiwang Kartasasmita acknowledged that while some companies face challenges, the industry is also experiencing new investments and business expansions. To further enhance its performance, the government is preparing a suite of support measures. These include investment incentives, restructuring programs, and credit facilities specifically for labor-intensive industries. Additionally, the government will facilitate export financing through the Indonesian Export Financing Agency, refine trade safeguard policies, and expedite the "Making Indonesia 4.0" initiative. The adoption of green industry standards is also a key focus.

Although some companies are facing pressure, there are simultaneously new investments and business expansions taking place.

— Agus Gumiwang Kartasasmita, Minister of IndustryThe Minister of Industry acknowledges the mixed economic conditions within the textile sector, noting both challenges and growth opportunities.

A significant opportunity for growth lies in the implementation of the Indonesia-European Union Comprehensive Economic Partnership Agreement. Industry players are urged to capitalize on this by improving quality, efficiency, and innovation to meet international standards. The Minister emphasized that global markets now consider manufacturing methods alongside products, highlighting sustainability not as a burden but as a competitive advantage.

Data from the Indonesian Textile Association reveals a modest 1.57 percent increase in export value compared to the same period in 2025, reaching US$4.85 billion from US$4.77 billion. However, imports also rose from US$3.41 billion to US$3.58 billion. This led to a trade surplus of US$1.27 billion, a decrease from the US$1.37 billion surplus recorded in the first half of 2025. Rising raw material costs, partly driven by global oil prices, also present a challenge.

It is important to remember that sustainability is no longer a burden, but rather a competitive advantage in the global arena.

— Agus Gumiwang Kartasasmita, Minister of IndustryThe Minister emphasizes the growing importance of sustainable practices as a key factor for competitiveness in international markets.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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