As Southeast Asia's largest economy, Indonesia boasts a massive market of 270 million people with robust demand for textiles.
In recent years, the Indonesian government's import liberalization policies aimed at enhancing national industrial competitiveness have presented unprecedented market opportunities for fabric and textile exporters.
However, complex customs regulations, stringent certification requirements, and unique local trade rules have deterred many exporting companies.
I. Overview of Indonesia's Fabric Market
1. Indonesia's textile industry generates an annual output value of US$15 billion, serving as one of the pillars of its national economy.
2. However, the local textile supply chain remains incomplete, maintaining significant reliance on imported fabrics—a factor that creates vast market potential for Chinese exporters.
3. According to the latest data, Indonesia's textile import market continues to expand, particularly for high-quality cotton and synthetic fabrics.
4. Local Indonesian textile enterprises are primarily concentrated on Java Island, especially in Bandung, West Java, and areas surrounding Jakarta. Most of these companies need to import cotton, yarn, and premium fabrics from abroad to meet the demand for producing mid-to-high-end apparel.
II. HS Code Guide for Exporting Fabrics to Indonesia
Accurate customs codes are the first step to successful exports. Fabric exports to Indonesia primarily involve the following HS codes:
1. Cotton fabrics: HS 52 series (e.g., 5208-5212)
2. Synthetic fabrics: HS 54-55 series
3. Knitted fabrics: HS 60 series
4. Other textiles: HS 50-60 series
Per Indonesian customs requirements, HS codes must be reported using the 10-digit BKD coding system, which is more detailed than the internationally recognized 6-digit HS codes.
Exporters must verify the latest codes, as any discrepancies may result in cargo detention at customs or even penalties of up to 25% of the goods' value.
III. Interpretation of New Indonesian Import Regulations
In July 2025, the Indonesian government announced a series of import liberalization measures aimed at streamlining business processes and enhancing national industrial competitiveness.
Policy Benefits:
1. Import license requirements were eliminated for 482 HS tariff code items;
2. For raw materials and industrial auxiliary materials, only pre-export inspection reports are required as regulatory documentation;
3. Local governments must complete franchise operation license approvals within 5 days;
Special Requirements for Fabric Imports:
Despite policy easing, textile imports remain subject to certain regulations. Per Indonesian Ministry of Trade Regulation No. 17 of 2025, imported fabrics still incur safeguard duties to protect local industry stability.
Additionally, importers must apply for the corresponding import license and comply with technical review regulations from the Ministry of Industry.
Tariffs and Taxes for Exporting Fabrics to Indonesia
Beyond basic import duties, exporting fabrics to Indonesia involves the following taxes:
1. Safeguard Measures Tax: Rates vary by product category
2. Value-Added Tax (VAT): Typically 11%
3. Income Tax: Calculated based on the value of imported goods
Notably, Indonesia will impose a three-year safeguard duty on imported cotton yarn starting October 30, 2025, with an initial rate of IDR 7,500 per kilogram.
While this policy directly targets cotton yarn, it reflects Indonesia's trend toward protecting its domestic textile industry, with fabrics potentially becoming the next affected sector.
Characteristics of Indonesia's Fabric Market Demand
Understanding local market demand characteristics is key to successful exports:
Quality Requirements: Indonesian market demands for fabric quality are increasingly stringent. Taking cotton fabrics as an example, high-spec tightly knitted C40S bleached cotton fabrics command prices around USD 2.92/kg, equivalent to approximately RMB 23,900 per ton.
Category Preferences: Local demand is strong for fabrics used in Muslim attire, particularly natural fiber materials with excellent breathability suited for tropical climates.
Price Sensitivity: Competition is fierce in the mid-to-low-end fabric market, where price is the primary competitive factor. For instance, lower-grade C32S knitted combed yarn fabrics in Indonesia are quoted at approximately USD 2.59-2.60/kg, equivalent to RMB 21,200-21,300 per ton.
Seasonality: Indonesia experiences two major sales peaks annually—around Ramadan and during the year-end Christmas period. Exporters should plan shipments in advance.
Export Process and Key Steps
Successful exports require adherence to a clear process:
1. Market Research: Gain in-depth understanding of Indonesia's fabric market competition landscape and price levels.
2. Identify Importers: Build local networks by attending Indonesia's international textile exhibitions or contacting the Indonesian Textile Association
3. Price Negotiation: Quotations should be in USD or IDR with clear trade terms specified
4. Contract Signing: Contracts must detail quality standards, delivery schedules, payment methods, and other terms
5. Prepare Export Documents: Including commercial invoices, packing lists, certificates of origin
