The Indonesian government has officially rolled out a strategic tariff policy designed to safeguard domestic producers of cotton woven fabrics against the rising tide of imported goods. This decisive move follows a comprehensive investigation by the Indonesian Trade Safeguard Committee (KPPI), which concluded that a significant surge in cotton fabric imports has begun to destabilize the nation’s long-standing textile industry. The new duty, known as Bea Masuk Tindakan Pengamanan (BMTP) or Safeguard Measures Import Duty, will be applied on top of existing import duties and most-favored-nation rates.

The protectionist policy is scheduled to remain in effect for three years, featuring a tiered structure where the tariff rates gradually decrease each year. During the initial phase, rates will range between Rp3,000 and Rp3,300 per meter, depending on the specific tariff classification. By the second year, the duty will drop to a range of Rp2,800 to Rp3,100, finally settling between Rp2,600 and Rp2,900 in the third year. While the policy aims for broad protection, the government has granted exemptions to 122 developing nations under the World Trade Organization (WTO), including Malaysia, Thailand, and the Philippines, provided they submit a valid certificate of origin.

This policy intervention comes at a critical time for Indonesia’s textile and apparel industry, which remains one of the country's largest manufacturing sectors. Supported by a robust value chain that stretches from raw fiber production to finished garments, the sector has shown remarkable resilience. According to recent data, the industry's GDP grew by 4.26 percent in 2024, and the Purchasing Managers’ Index (PMI) hit a nearly year-long high in November 2025. Globally, Indonesia remains a heavyweight, ranking 13th among textile-exporting nations with exports valued at $13.4 billion in 2023.

Despite its global presence, the heart of the industry lies in its massive domestic market, which accounts for approximately 30 percent of total production. This demand is fueled by the rapid expansion of e-commerce, rising urban purchasing power, and a deep-seated interest in global fashion trends. Furthermore, Indonesia’s status as home to roughly 12 percent of the world’s Muslim population—about 240 million people—serves as a primary engine for growth. Approximately 80 percent of the nation's Muslim apparel production is consumed domestically. By implementing these tariffs, the government aims to ensure that local weavers can compete fairly within this lucrative home market while maintaining the industry's upward growth trajectory.