Rising exports offer new hope for textile industry

Indonesia's textile industry is poised for growth, with exports anticipated to rise by up to 4 percent in 2027, according to the Indonesian Export Financing Institution (LPEI). However, the sector faces challenges in supply-chain integration and outdated machinery, which hinder its potential. LPEI anticipates a 2 to 3.2 percent increase in exports this year, and a 3.5 percent to 4 percent rise by 2027 as global demand rebounds.

Finished fabrics make up around 74 percent of the country's total textile and textile products (TPT) exports, underscoring the industry's significance.

Strengthening supply chains will be crucial to sustaining export performance, as global buyers demand quality, timely delivery, traceability, compliance with international standards, and sustainable materials. Sukatmo Padmosukarso, LPEI executive director, noted that demand for sustainable textile products, particularly in the premium segment, is expected to continue growing, offering new growth opportunities for Indonesia's exports.

Global demand for upstream textile products, including yarn and woven and knitted fabrics, has started to recover in 2025, with Japan, Turkey, Bangladesh, China, and the United States expected to remain vital markets. Bangladesh and Vietnam's burgeoning garment industries could provide additional opportunities for Indonesian textile materials to access global supply chains.

Nonetheless, competition from China, India, Vietnam, and Turkey, along with shifting trade policies and inconsistent global demand, pose risks to the industry's growth. Padmosukarso emphasized that industries adapting to buyer needs and entering higher-value segments are likely to benefit most from the recovering demand and secure sustainable export growth.