Indonesia is one of the key exporters of textile and apparel (T&A) products. Over the last five years, its T&A exports and imports remained stagnant. Whereas its exports have declined to $12.4 billion in 2017 from $12.6 billion in 2013, its imports have also come down to $7 billion from $7.1 billion during the same period.
Indonesia’s textile and apparel trade balance recorded a surplus of around $5.4 billion in 2017.
Man-made textiles is the largest imported category in Indonesia, representing about 47% of its total textile and apparel imports (2017). This is followed by cotton textiles, others and apparel with a share of 31%, 14% and 7% respectively. Top 10 suppliers accounted for around 88% of textile and apparel imports by Indonesia. China and Hong Kong are the largest suppliers accounting for 42% share, followed by the Republic of Korea and the US with a share of 11% and 8% respectively.
India’s exports to Indonesia
India is amongst the top suppliers of T&A products to Indonesia. India’s exports stood at around $230 million in 2017. It has registered a growth at a CAGR of 7% over the last five years. There was a decrease in India’s exports in 2015 due to mounting competition from other countries like China, Korea, the US, etc. However, since last three years India’s exports to Indonesia are again increasing.
Cotton textiles is the largest category with a share of 65% in India’s T&A exports to Indonesia. This is followed by man-made textiles and apparel having a share of 20% and 7% respectively.
India’s exports to Indonesia have increased at a CAGR of 7% over the last five years. However, the share remained 2-3% during the same period of time.
With a share of about 42%, China is the leading T&A supplier to Indonesia, but it is now focusing more on the domestic market as manufacturing costs in China are increasing. This gives India an opportunity to grab China’s share and increase its exports to Indonesia.
Cotton has been the largest exported commodity to Indonesia from India, but Indonesia is now shifting its focus from cotton-based to man-made textile. India has the opportunity to increase its share of man-made textiles by focusing on export of polyester filaments and viscose staple fibre.
By Wazir Advisors, sanjay@wazir.in