The Indonesian Textile Association (API) has commenced exploring potential new export markets in response to the United States' (US) plan to impose a 32% reciprocal tariff on products from Indonesia. Potential markets with growing demand for textile products include Japan, Germany, the United Arab Emirates and Middle Eastern countries. Indonesia is well-positioned to serve as a source of textile and garment products for Germany and other Eastern European countries seeking alternatives to China and India. Furthermore, Japan and South Korea have opportunities for increased exports, with a preference for high-quality textile products from developing countries. Australia and Canada have expressed interest in value-added products, including eco-friendly options.
David Leonardi, API Vice Chairman, stated that the industry is becoming more cautious about maintaining the trade balance with the US. Businesses are trying to balance exports to the US with market diversification. Indonesia has the opportunity to maintain or increase the surplus, especially for niche products, as long as the products remain competitive in terms of price and quality. To diversify export markets, Indonesia needs to improve product quality and innovation, including design, environmentally friendly materials, and finished product diversification. It also needs to strengthen branding and promotion, and improve logistics and infrastructure efficiency. It can also use free trade agreements such as RCEP, the European Union, or Africa. API encourages strengthening trade partnerships and promotions through international exhibitions, customising products to local market needs and preferences of new destination countries, and supporting micro, small, and medium enterprises (UMKM) to go global with training and export facilitation.
