Textile and Garment Industry in Indonesia: Machinery Restructuring to Boost National Fashion Competitiveness

The restructuring of machinery and the textile industry has once again taken center stage at this year’s Bali Fashion Network, which highlights real inspiration and collaboration between the government, industry players, and local fashion enthusiasts. In its fourth edition, the event featured Ir. Reni Yanita, M.Si, the Director General of Small, Medium, and Miscellaneous Industries (IKMA) at the Ministry of Industry of the Republic of Indonesia, who presented a session on “Restructuring Machinery and Equipment to Boost the Competitiveness of the National Textile, Garment, and Fashion Industries.”

The event was also attended by senior officials from the IKMA Directorate, the Director of IKMA for Textiles and Handicrafts, the Head of the Bali Provincial Industry Office, and the Head of the Fashion and Craft Industry Empowerment Center (BPIFK). This cross-agency collaboration demonstrates the government’s commitment to strengthening the fashion, garment, and textile sectors, especially for Small and Medium Enterprises (IKM), which are the backbone of the national creative industry.

Building a Stronger Ecosystem 

In her welcoming remarks, Reni Yanita expressed appreciation for the continuity of the Bali Fashion Network as an annual event that consistently brings together various stakeholders in the fashion, garment and textile industries. According to her, such an event plays a crucial role in reinforcing synergy between government, entrepreneurs, designers, and raw-material suppliers like Paramatex, which has been a strategic partner in supporting textile needs and developing eco-friendly material innovations. 

“Hopefully the presence of BPIFK will increasingly stand firm as part of a sustainable fashion and garment ecosystem. Especially since raw materials are already supported by local players like Paramatex,” said Reni. 

She went on to emphasize that when there is innovation or special demand from SMI entrepreneurs regarding product development in fashion and garments, synergy with industrial partners like Paramatex can help realize them through operational activities and material research. 

Contribution of the Textile Industry to the National Economy 

Reni also highlighted the importance of the textile and garment industries in the national economy. Based on data from the Ministry of Industry, by the second quarter of 2025, the contribution of the non-oil & gas manufacturing sector to the national Gross Domestic Product (GDP) reached 16.92%, growing 5% compared with the same period in the previous year. Meanwhile, the textile and apparel (garment) industry recorded growth of 4.64%, indicating that this sector remains productive and adaptive amid global economic dynamics. 

“This growth shows that the national textile industry is capable of holding its ground and continues to innovate. Through events like Bali Fashion Network, we hope the fashion, garment and downstream sectors are able to maintain this growth momentum. Indonesia has a large market and competent human resources,” she explained. 

In addition to its contribution to GDP, the export value of the non-oil & gas manufacturing industry also rose to 196.54 billion USD, an increase of 5.33% compared to last year. Exports of textile and garment products increased by 2.43%, which shows that Indonesia’s product competitiveness in the global market remains high even when facing tariff policies from several destination countries. 

Machinery and Equipment Restructuring for the Textile and Garment Industries

One of the main points in Reni’s presentation was the machinery and equipment restructuring program for the textile and garment industries initiated by the Ministry of Industry. The program aims to assist SMIs in improving efficiency, productivity and competitiveness by modernizing production equipment. 

“Through this program, the government provides cashback or reimbursement of part of the purchase price of machinery and equipment. For domestic products, the reimbursement is up to 40%, while for imported products it is a maximum of 25%,” she explained. 

This restructuring program is regulated under Peraturan Menteri Perindustrian Nomor 9 Tahun 2022 concerning the provision of assistance facilities for machinery and equipment. The assistance provided ranges between Rp10 million and Rp500 million, depending on the capacity and needs of the SMI, with a maximum of three times utilization for the same business actor. 

Reni emphasized that this limitation is applied so that all SMIs across various regions have equal opportunity to access the facility. “The goal is that all SMIs, including in the garment and textile sectors, can feel the benefit of this program, not just the actors who are already advanced,” she added. 

Eligibility Requirements and Application Procedures

To participate in this restructuring program, SMI actors must hold a business license according to the Indonesian Standard Industrial Classification (KBLI) under the supervision of Dirjen IKMA and have a workforce of no more than 99 people. Additionally, the purchased machinery or equipment must be new, with a production age of no more than three years, and must be supported by official documents such as invoices, proof of transfer or valid purchase receipts. 

The timing of machine delivery is also an important factor: only purchases and shipments of machinery between 1 August 2024 and 31 August 2025 can be submitted in this program period. All registration processes are conducted through the digital system SIINAS (National Industry Information System). “Make sure every SMI actor has a SIINAS account so that the application process runs smoothly. All steps have been made available, from application form, machine list to final verification,” explained Reni. 

This program is open until the end of November 2025, and it is expected to be used maximally by fashion, garment and textile industry players throughout Indonesia. 

Strategic Role of BPIFK Bali

Beyond the socialization of the restructuring program, Reni also highlighted the important role of BPIFK in Bali. According to her, BPIFK plays three main roles, summarized as “3C”: 

• Create — becoming a creative hub for technical and creative skill development. 

• Connect — bridging collaboration between SMI actors, designers, producers and raw material suppliers in the garment and textile sectors. 

• Catalyst — functioning as an accelerator for the growth of fashion and garment businesses so that they can level up and compete globally. 

Looking Ahead to the Future of Fashion and the Textile Industry in Indonesia 

Through a range of supportive policies and programs such as machinery restructuring, creative hub development, and collaboration with private sector players like Paramatex, the Ministry of Industry reiterates its commitment to strengthen the foundation of the national fashion, garment and textile industries. 

In her final remarks, Reni emphasized that the garment and textile industries are not only about aesthetics, but also about efficiency, innovation and sustainability. “We want to ensure all small and medium industry actors continue to grow, innovate, and become part of the global supply chain with Indonesia’s distinctive character and quality,” she concluded.