Indonesia Imposes Safeguard Tariffs on Cotton Fabrics Imports

Protective Measure for Domestic Textile Industry

The Indonesian government has implemented safeguard tariffs on imported cotton fabrics through Finance Minister Regulation No. 98/2025, which was enacted on December 31, 2025, and takes effect on January 10, 2026. This measure is designed to shield the domestic textile industry from the adverse effects of a significant surge in imports.

Investigation Findings

The Indonesia Trade Safeguarding Committee (KPPI), led by Chair Julia Gustaria Silalahi, conducted an investigation that revealed serious injury to domestic manufacturers of cotton fabrics. The investigation confirmed that the surge in imports of similar products was the primary cause of this injury. The safeguard tariffs are intended to provide relief to local producers by mitigating the impact of these imports.

Implications for Trade

The introduction of safeguard tariffs is expected to have several implications for trade. Firstly, it will likely increase the cost of imported cotton fabrics, making domestically produced fabrics more competitive in the local market. This move is part of Indonesia's broader strategy to protect its domestic industries while complying with international trade regulations.

Economic Context

The decision to impose safeguard tariffs reflects the government's commitment to supporting local industries affected by global trade dynamics. By taking this protective measure, Indonesia aims to safeguard employment and economic stability within the textile sector, which is a significant contributor to the national economy.