Smuggled used garments undercut local producers, cost jobs, and drain state revenue
Indonesia’s textile and garment sector is facing mounting pressure as illegal imports of secondhand clothing continue to flood the domestic market, eroding competitiveness and weakening one of the country’s most labor-intensive industries.
A Growing Threat to Domestic Producers
Illegal imports of used clothing now account for nearly half of Indonesia’s total apparel inflows between 2020 and 2025, according to Deputy Minister of Industry Faisol Reza. Speaking before the House of Representatives’ Commission VI, Faisol said most of these items enter the country through smuggling channels, bypassing customs duties, value-added tax, and income tax obligations.
Price Gaps That Distort Competition
Because illegally imported used clothing avoids all forms of taxation, it is sold at prices between 10.4 and 19.9 times cheaper than domestically manufactured apparel. Faisol warned that this creates a deeply uneven playing field, as local producers must absorb higher production costs while competing against untaxed, often branded, secondhand goods.
Job Losses Across the Textile Sector
The impact has already translated into significant job losses. Data from the Confederation of Indonesian Trade Unions show more than 126,000 textile and garment workers have been laid off. Separately, the Manpower Ministry recorded 88,519 layoffs in the sector between January and November 2025, underscoring the social cost of unchecked illegal imports.
Laws Exist, Enforcement Lags
Indonesia has long banned the import of used clothing under Trade Ministry Regulation No. 40/2022, reinforcing earlier prohibitions issued in 2015 and 2021. Despite this, smuggling remains widespread. Official data from the Central Statistics Agency recorded 3,865 tons of secondhand clothing imports in 2024, which customs authorities attributed to passengers’ personal belongings.
Trade Data Reveal a Wider Inflow
Partner-country data suggest the real volume is far higher. Trade Map figures indicate a major discrepancy between Indonesia’s import records and export data from its trading partners. From Malaysia alone, exports of used clothing to Indonesia reached an estimated 24,000 tons in 2024, highlighting gaps in monitoring and enforcement.
A Strategic Industry at Risk
The textile and textile products industry remains a pillar of Indonesia’s manufacturing base. As of November 2025, textile exports reached $10.97 billion, equivalent to Rp183.97 trillion, contributing 5.33 percent of national exports. The sector employs around 4 million workers, nearly 20 percent of the manufacturing workforce, and supplies about 70 percent of domestic clothing demand.
Untapped Strength in the Domestic Market
Despite current pressures, the domestic apparel market holds strong potential. BPS data show Indonesians spend an average of Rp35,000 per capita per month on clothing, footwear, and headwear. With a population of 281.6 million, this translates to roughly Rp10 trillion in monthly spending, or Rp119.8 trillion annually, a scale Faisol said could significantly strengthen national industry if better protected.
The continued influx of illegal secondhand clothing exposes structural weaknesses in trade enforcement while threatening jobs, tax revenue, and industrial resilience. Strengthening controls is not only critical for safeguarding Indonesia’s textile workforce but also for preserving fair trade dynamics that matter deeply to regional partners, including Singapore, which remains closely linked to Indonesia through manufacturing, labor, and trade flows.
Sources: Jakarta Globe (2026)
Keywords: Secondhand Clothing, Textile Industry Indonesia, Garment Workers, Illegal Imports, Trade Regulation
