Indonesia is set to import shredded worn clothing from the United States as part of the reciprocal trade agreement, known as the Agreement on Reciprocal Trade (ART). The move comes as the Indonesian government assesses the potential impact on local modest and medium-sized enterprises (SMEs).
The Ministry of Cooperatives and SMEs is currently evaluating the implications of the imports for the sustainability of domestic businesses.
Temmy Satya Permana, Deputy for Micro and Small Enterprises at the Ministry of Cooperatives and SMEs, acknowledged that imports of shredded worn clothing have occurred previously. However, he noted that the capacity of domestic textile waste recycling machinery remains less than optimal.
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“We at the Ministry of Cooperatives and SMEs are reviewing this agreement, which is not yet finalized. Regarding shredded clothing, we do have an industry capable of processing it into textiles and recycling it. Imports of shredded clothing have occurred before, but the optimization of the machinery hasn’t reached the level we’d hoped for,” Temmy said during a media briefing in Jakarta on Tuesday, March 10, 2026.
If recycling machinery can operate at full capacity, reliance on expensive imported raw materials could be reduced. The imports of shredded worn clothing are projected to provide a lower-cost fabric solution for the industry.
“But, we hope that if it can turn into a good raw material for domestic textiles, the price should be cheaper,” he explained.
Temmy stated that he cannot guarantee the policy won’t lead to an increase in the availability of used clothing (thrifting) in the domestic market. However, he emphasized the government’s commitment to protecting the local market.
“When asked if there’s a guarantee that used clothing will increase, it’s already been happening. Now it’s a matter of how things unfold, and the government’s stance on protecting the domestic market is clear. I believe this has already been discussed at the Ministry of Finance,” Temmy added.
Industry Opposition
Prior to the agreement, textile business owners associated with the Indonesian Association of Convection Entrepreneurs (IPKB) voiced opposition to the import of shredded worn clothing from the United States.
IPKB Chairman Nandi Herdiaman stated that the association had no objections to the import of cotton with a 0% tariff, as it supports the raw material needs of the industry.
“We fully support the import of cotton since it meets the raw material needs of the industry, but we strongly object to the import of used clothing as it will disrupt our members’ market,” Nandi said in a statement on Wednesday, February 25, 2026.
He then questioned whether the imports would be limited to shredded clothing or include used garments. He similarly urged the government to consider the impact on small and medium-sized industries (SMIs) that employ millions of people.
“Because even if they say it’s shredded clothing, what guarantee is there that it won’t be used clothing? Especially since it enters through Bonded Zones, which are commonly known as places where illegal imports leak,” Nandi added.
Haryo Limanseto, Spokesperson for the Coordinating Ministry for Economic Affairs, refuted claims that the import of used clothing from the U.S. Is part of the ART agreement. Haryo affirmed that the imports consist of clothing that has been destroyed.
“That’s not true (import of used clothing); what is regulated here is the import of shredded worn clothing (SWC), which is clothing that has been destroyed into raw materials for the industry and does not have economic value like intact used clothing sold back into the market (thrifting),” Haryo said in a statement.
Haryo explained that SWC is imported to meet the raw material needs of the patch fabric industry and recycled textile products (yarn). This differs substantially from the regulations prohibiting the import of ready-to-wear used clothing.
“The government has ensured that there is a domestic industry that will absorb all of the SWC imports as a raw material for production, so no products will enter the market as used clothing,” he added.
(rea/hns)
