The Indonesian government has officially extended safeguard import duties on synthetic and artificial staple fiber yarn products through Finance Ministry Regulation (PMK) No. 37/2026, as authorities seek to shield domestic textile manufacturers from a surge in imported products.
The regulation reinstates safeguard measures that had previously been imposed under PMK 46/2023, which recently expired. The new policy reflects the government’s ongoing concern over the pressure faced by local yarn producers amid rising import competition in the textile sector.
Finance Minister Purbaya Yudhi Sadewa said the extension was necessary because domestic manufacturers still require additional time to complete structural adjustments aimed at improving competitiveness and stabilizing production capacity.
According to the regulation, the government concluded that imports of synthetic and artificial staple fiber yarn continue to pose a serious threat to Indonesia’s domestic textile industry.
“Imports of yarn products other than sewing thread made from synthetic and artificial staple fibers continue to create serious injury or the threat of serious injury to domestic industry, and therefore safeguard import duties need to be extended,” the regulation stated.
The safeguard policy officially came into effect on May 22, 2026.
The government defines safeguard import duties, locally known as Bea Masuk Tindakan Pengamanan (BMTP), as additional import charges designed to restore conditions for domestic industries suffering serious losses due to sudden increases in imported goods.
The measure also aims to provide local industries with time to carry out necessary structural adjustments in order to remain competitive against foreign suppliers.
The latest regulation applies specifically to imported yarn products excluding sewing thread that are produced from synthetic and artificial staple fibers. The products covered under the regulation fall under tariff classifications 5509.22.00, 5509.32.00, 5509.51.00, 5509.53.00, 5510.12.00, and 5510.90.00.
Under Article 3 of PMK 37/2026, safeguard duties will remain in place for two years. The regulation includes detailed tariff rates listed in the annex attached to the ministerial decree.
The safeguard duties are imposed in addition to standard import duties under the Most Favoured Nation framework or preferential tariffs granted under international trade agreements and bilateral arrangements.
The move highlights Indonesia’s increasingly defensive trade policy stance as domestic manufacturers continue to struggle with intense competition from imported textile products, particularly from large exporting economies.
The regulation also includes a list of 123 developing World Trade Organization member countries that are exempted from the safeguard measures. However, two major economies, China and the United States, are notably absent from the exemption list.
The exclusion of China is particularly significant given the country’s dominant role in the global textile supply chain and its position as one of Indonesia’s largest sources of imported textile and yarn products.
Indonesia’s textile and garment industry has repeatedly called on the government to strengthen import controls and trade protections, arguing that low-priced imported products have undermined local production and weakened the competitiveness of domestic manufacturers.
The textile sector remains one of Indonesia’s largest manufacturing industries, employing millions of workers and contributing significantly to export earnings. However, the industry has faced mounting pressure in recent years from rising imports, weak global demand, fluctuating raw material prices, and higher production costs.
Industry groups have long argued that safeguard measures are necessary to prevent further factory closures and layoffs in labor-intensive manufacturing sectors.
The extension of safeguard duties comes at a time when many countries are increasingly adopting trade defense measures to protect domestic industries amid slowing global economic growth and intensifying competition in international manufacturing markets.
Indonesia has previously implemented similar safeguard measures on steel products, ceramics, textiles, and other manufacturing goods to support domestic industries considered vulnerable to import surges.
The latest policy also signals the government’s broader strategy to strengthen local industrial resilience while balancing commitments under international trade agreements and WTO rules.
Under WTO regulations, safeguard duties may be imposed temporarily when a sudden increase in imports causes or threatens serious injury to domestic producers. Countries implementing safeguard measures are generally required to provide evidence of injury and limit the duration of such measures.
The Indonesian government maintains that the safeguard extension is temporary and intended to provide local producers with sufficient time to improve efficiency, modernize operations, and enhance competitiveness.
Textile manufacturers are expected to use the additional protection period to carry out structural reforms, invest in production upgrades, and adapt to changing market conditions.
At the same time, importers and downstream industries that rely on imported yarn materials may face higher costs as a result of the extended duties. Some businesses have raised concerns that additional import charges could increase production expenses for garment manufacturers and potentially affect export competitiveness.
Nevertheless, authorities argue that protecting the upstream textile sector is critical for maintaining broader industrial stability and preserving employment within Indonesia’s manufacturing economy.
The safeguard policy also reflects growing global tensions surrounding trade protectionism, industrial policy, and supply chain security, particularly as countries attempt to strengthen domestic production capabilities in strategic sectors.
Indonesia’s government has increasingly emphasized industrial downstreaming and domestic value creation as part of its long-term economic agenda. Policies aimed at supporting local manufacturing industries have become central to efforts to reduce dependence on imports and improve trade balances.
The extension of safeguard duties on yarn imports is expected to remain closely monitored by industry participants, exporters, and international trading partners over the next two years as Indonesia balances domestic industrial priorities with global trade obligations.
