Finance Minister Purbaya Yudhi Sadewa will crack down on illegal imports of used clothing (balpres) with fines, a move that textile industry players have been waiting for to restore their competitiveness. This policy aims to have a deterrent effect while protecting domestic production.
In Pasar Senen, Jakarta, thrift merchants are getting nervous about the new rules. "We're worried, ma'am. If Purbaya is aggressive, he will close our thrift ," said Taufik (not his real name), one of the vendors. However, Purbaya insists that Pasar Senen will not be closed, but will be 'filled' with domestic goods.
Data from the Directorate General of Customs and Excise (Kemenkeu) noted that from 2024 to August 2025, there have been 2,584 cases of illegal ballpres enforcement, with a total of 12,808 boxes of evidence worth IDR 49.44 billion. However, prosecution in the form of destruction is considered insufficient. "I went out of my way to destroy it, the person was even fed in prison," said Purbaya at the Ministry of Finance office on October 22.
But on the ground, the policy is causing anxiety. Taufik is not the only one worried. "If the expedition is fined, there will be less stock, and the price of bales will rise. It's already gone up," he complains. He sells used clothes imported from Japan and Korea, which are becoming increasingly difficult to find.
Although Purbaya insists that Pasar Senen will not be closed, the reality, according to Taufik, is that there is no local substitute. "There is no thrift in Indonesia, Ma'am. There is KW (counterfeit goods-read)," said Taufik, laughing bitterly.
Purbaya's New Breakthrough
The government is no longer playing games in dealing with the flood of used clothing imports that have eroded the domestic textile industry. Finance Minister Purbaya Yudhi Sadewa emphasized that he would take firm action against the perpetrators of illegal imports or balpres that have been freely entering markets in big cities, including Jakarta.
This curbing, said Purbaya, does not mean closing down trade activities in thrifting centers such as Pasar Senen. Instead, he said the area could be transformed into a space for legal and competitive local products.
"Pasar Senen will not be closed. Later it can be filled with domestic goods," said Purbaya at the Ministry of Finance office, Jakarta, Wednesday (22/10/2025).
He emphasized that the government wants to protect legitimate UMKM players and produce goods domestically, not to revive illegal supply chains that pressure local textile producers. "Our goal is not to revive illegal UMKM , but legal UMKM , which can create employment and production in the country," he said.
As part of this decisive step, Purbaya will implement a new regulation in the form of fines for perpetrators of illegal used clothing imports, not just destruction of goods or imprisonment. He assessed that the enforcement mechanism so far has actually made the state lose twice: the domestic industry is depressed, while the state budget is drained to destroy confiscated goods and finance prisoners.
"So far, the goods have been destroyed, the perpetrators imprisoned, but the state does not get anything. In fact, it costs money. So later we will change it, we will fine them," he said.
Purbaya also claimed to have pocketed a list of names of ballpres import players and promised to take firm action, including blacklisting them from future import activities. This move is part of the government's grand strategy to restore the national textile industry, which has been under pressure for the past few years due to the abundance of cheap imported goods and soaring production costs.
Impact of Tightening Imports for the Textile Industry
Textile businesses from upstream to downstream have long complained about the flood of imports. Chairman of the Indonesian Textile Association (API) Jemmy Kartiwa Sastraatmadja emphasized that the problem of ballpres is not just about used clothes.
According to him, this concerns the long chain of the textile industry that is interconnected, absorbs millions of workers, and is one of the sectors with the longest and most complex economic chain in Indonesia.
"If imported apparel enters too easily, our workers will automatically have nothing to sew. From tailors to fabric makers, from fabrics to threads, to fibers and filament threads, everything is affected," he said when contacted by Suar, Sunday (26/10).
Based on data from the Ministry of Industry, until August 2024, the textile industry absorbed around 3.97 million workers or nearly 20% of the total manufacturing workforce. But since the pandemic, layoffs have been widespread, production capacity has decreased, and some companies have gone out of business.
Chairman of the Indonesian Textile Association (Apsyfi) Redma Gita Wirawasta noted that the import volume of yarn and fabric has jumped sharply since 2021. "For yarn, from 200 thousand tons in 2021 to 380 thousand tons in 2024. Fabric rose from 600 thousand tons to nearly 1 million tons," she added.
According to Apsyfi's records, since 2022, these heavy imports have resulted in the bankruptcy of two large producers, while the other two are only operating at 40 percent of capacity. Of the remaining six producers, the average utility has dropped to 70 percent. "Our association members have decreased from 23 companies in 2022 to 19 this year," he said.
The government tried to respond through Minister of Trade Regulation No. 17 of 2025, which tightened imports of textiles and textile products by requiring import approval documents. However, the regulation, which came into effect on August 29, 2025, has not been effective enough to restore the spirit of the business world. The reason is that imported products have already flooded the domestic market, making many small businesses depressed to the point of going out of business.
Data from the Bandung Confectionery Entrepreneurs Association (IPKB) shows that around 40% of small and medium-sized confectionery industries have stopped operating since the Covid-19 pandemic. This situation has worsened due to weak supervision of import flows.
The government argues that most imported products are needed to meet the demand for raw materials in the downstream sector. But Redma emphasized that the argument is not entirely correct. "The industry here can actually produce. It's just that, once dumped goods enter, they lose the price competition. The difference can be up to 40 percent," he said.
From Ban to Non-Tariff Barrier
Through Minister of Trade Regulation (Permendag) No. 17/2025, the government tightened the inflow of imported textile and apparel products by requiring import permits under the Prohibition and Restriction (Lartas) scheme. The Ministry of Industry complements this regulation with Permenperin 27/2025, which regulates the requirements of producers and importers so that the inflow of products is more controlled.
Jemmy thinks this is a healthy non-tariff barrier. "In the past, apparel imports could enter freely. Now it has to go through a license from the Ministry of Industry and Trade. The positive impact may only be felt in the first or second quarter of 2026, but at least there is hope," he said.
Including the addition of fines, for Jemmy, this policy is another form of trade barrier that is needed. "There are various kinds of trade barriers. One of them is sanctions. I think the idea of imposing fines is good, considering Indonesia's long coastline. If there is no deterrent effect, the flow of illegal goods will continue," he said.
The flood of imported goods, including used clothing, has made local industries lose competitiveness. On the other hand, many countries are now actually strengthening their domestic markets, after the era of tariff-free globalization that began to be abandoned. "Now many countries are competing to protect their own industries. Indonesia must also go in that direction," he said.
In this case, Jemmy also admits that the weakening purchasing power of the people has increased the demand for cheap goods. "If people don't have money, what can they spend it on? When purchasing power drops, they will choose the cheapest. So the main solution is not just policing, but how to create jobs so that purchasing power rises."
Jemmy emphasized that job creation is the root of all problems. "If industry can increase utility, it will automatically absorb labor. When people work, they get paid and can spend their money. Purchasing power rises, the economy moves," he said. Therefore, according to him, affirmative policies towards local producers need to focus on job creation, not just price subsidies.
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In addition to withstanding import flows, the local textile industry faces serious challenges on the production and energy side. Under the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), textile products can only enjoy zero percent tariffs to Europe if they are produced with environmentally friendly energy.
"This means that exports must meet green energy standards," Jemmy explained. He emphasized that the government needs real support, such as the provision of clean energy and gas pipeline infrastructure to industrial centers, especially Greater Bandung and Greater Solo. Without that, the industry's competitiveness in the European market will be jeopardized.
Green energy requirements are not just about environmental demands, but also about cost efficiency and attracting global investors. "The government must accelerate this facility. This is not just about exports, but the future of the national textile industry," he said.
Fines, Law, and Enforcement Integrity
On the other hand, Chairperson of the Indonesian Garment and Textile Association (AGTi), who is also Deputy President Director of PT Pan Brothers Tbk, Anne Patricia Sutanto, believes that additional sanctions will only be effective if accompanied by strict field supervision.
According to Anne, the main problem is the supervision aspect: how the illegal goods can enter. "The import of used clothing is clearly prohibited through the Permendag. So the problem is not just being fined, but why it can enter," she said by telephone to Suar, Sunday (26/10).
Anne, who is also the Chairperson of the Trade Division of the Indonesian Employers Association (Apindo), believes that the government needs to strengthen supervision at vulnerable points, especially small ports and unofficial sea lanes.
"These goods often enter through small ports that are not guarded by customs officials. So we need synergy between agencies, TNI, Polri, Customs, Ministry of Home Affairs, Ministry of Trade, and Ministry of Industry, to close the gap," he said.
For Anne, the addition of sanctions in the form of fines is only relevant for goods that have already entered the market. "If it has reached small traders, maybe it is better to be fined than burned like before. But for those at the level of large importers, they should not be allowed to escape at all," she said.
He proposed a two-way mechanism: for small traders who confess and are willing to disclose the origin of their goods, administrative fines are sufficient; but for those who are not honest and admit their violations, they still need to be prosecuted in accordance with the provisions in the applicable Criminal Code.
"If the violating trader does not admit the source of the illegal goods, it means there is an intention to hide the violation. That meets the requirements of a buyer not in good faith and must be processed. Because the Criminal Code is also clear, if the buyer knows that the goods are illegal but still buys them, the buyer can be subject to the article of participating in the criminal act," he said.
For industry players, supervision and integrity of law enforcement officials are key. "The regulations are in place, but if the enforcement in the field is not firm, it's useless. The leak needs to be mapped, which port, who is involved. If all parties have integrity, I'm sure it can be done," said Anne.
Anne's statement is in line with Purbaya's move to blacklist rogue importers so that they can no longer transact. But without a strong distribution chain tracking system, this policy could potentially only be a slogan on paper.
The Long Road to Industrial Recovery
The government hopes that curbing balpres will make room for legal local products, but the challenge remains huge. Jemmy emphasizes job creation as the root of the problem: "If the industry can increase capacity, it will automatically absorb labor. When people work, purchasing power rises, the economy moves."
According to Eko Listyanto, an INDEF economist, this policy is just a good first step. "This order prevents price wars that harm the local industry. But it needs to be continued with long-term strategies, such as reducing dependence on imported raw materials and strengthening upstream industries," he told Suar through a written statement, Sunday (26/10).
Eko also stressed the importance of socialization and enforcement of sanctions so that UMKM do not become victims. "If the goods sold are illegal, it is necessary to socialize and enforce sanctions so that UMKM sell products permitted by the government," he said.
With a combination of regulations, sanctions, supervision, and local production support, the textile industry is expected to recover, absorb labor, and become competitive again, while providing alternatives for people who have been dependent on imported products.
