Indonesia Textile Manufacturing Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Indonesia Textile Manufacturing Market Trends and Insights

Rising Near-Shoring of Activewear Orders from US & EU Brands to Java Clusters

Labor cost escalation in legacy Asian hubs and the need for faster replenishment bring Western labels to Java’s large-scale plants. Pan Brothers, with annual capacity of 117 million pieces, has secured incremental contracts for performance knitwear, underscoring the pivot toward Indonesia. Close proximity among yarn, fabric, and garment units inside the island’s industrial estates compresses lead times and lowers handling expenses. Nevertheless, uncertainty over potential US tariff hikes remains a watchpoint for producers.

Boom in Muslim Fashion Exports Driving Value-Added Garment Production

Indonesia leverages cultural affinity and design talent to supply the expanding global modest-fashion segment, estimated at USD 361 billion in 2023. Showcases at New York Fashion Week have raised international visibility, allowing local brands to command higher price points. Value-added lines create stickier customer relationships and require advanced embellishment techniques, prompting mills to invest in specialty machinery and skilled artisans.

Government “Making Indonesia 4.0” Incentives Accelerating Textile Automation

Targeted fiscal relief, priority customs lanes, and training grants are spurring mills to install digital looms, automated cutting rooms, and energy-efficient dyeing lines. Early adopters such as integrated mill PT Primatexco have trimmed defect rates and cycle times, demonstrating the productivity upside that encourages peers to follow suit. Automation also helps producers meet the shorter lead times demanded by global brands, widening Indonesia’s appeal as a near-shoring destination. Alignment with the roadmap’s export-oriented goals further incentivizes capital expenditure on Industry 4.0 solutions.

Surge in E-Commerce-Led Domestic Apparel Demand Among Gen-Z Consumers

Gen-Z shoppers place frequent small-batch online orders, prompting factories to adopt on-demand manufacturing and quick-response logistics. SMEs that pivot to digital storefronts tap nationwide demand without heavy distribution overheads. The trend also accelerates adoption of localized design and data-driven inventory planning, strengthening resilience against volatile export cycles.

Illegal Low-Priced Imports Eroding SME Weaving Margins

Unlawful inflows undercut local price points and have triggered factory closures and layoffs, pushing the government to tighten import permits and step up inspections. Even with 200% safeguard tariffs, weak enforcement lets counterfeit and sub-standard fabrics slip through ports, leaving community-based weaving clusters unable to recover overheads. The new Permenperin 5/2024 regulation aims to close loopholes by clarifying documentation requirements and synchronizing customs databases.

Chronic Port & Rail Bottlenecks Inflating Inter-Island Logistics Cost

Freight bills in Indonesia average 23.5% of GDP, with container dwell times at Tanjung Priok still higher than regional peers. Textile consignments from Sulawesi or Kalimantan incur added trans-shipment costs before reaching export gateways, blunting the cost advantage of cheaper land and labor outside Java^{[2]World Bank Group, “Improving Indonesia’s Logistics Performance,” World Bank Group, worldbank.org}. Government-partnered ICT upgrades and pre-clearance pilots are underway, yet meaningful cost relief hinges on accelerated port expansion and multimodal linkages.

Segment Analysis

By Process Type: Knitting Outpaces Weaving in a Comfort-Driven Era

Weaving retained a 37.3% share of the Indonesia textile manufacturing market in 2024, anchored by entrenched shuttle and rapier loom capacity across West Java clusters. Output caters mainly to shirtings and denim, segments that still support steady export volumes. Knitting, however, posts a 5.08% CAGR through 2030 as performance apparel and athleisure lines surge. Producers deploy circular knitting machines capable of smaller lot sizes and functional yarn blends, aligning with the short-run model favored by online retailers.

Knitting’s growth also reflects rising orders from sportswear labels seeking quick replenishment out of Southeast Asia. Java-based makers leverage co-located dye-houses and print shops to deliver fully packaged garments, capturing greater value than fabric-only suppliers. In the medium term, advanced knitting techniques such as seamless construction are expected to lift productivity and reduce post-production waste, reinforcing Indonesia’s competitiveness in comfort apparel.

Note: Segment shares of all individual segments available upon report purchase

By Textile Type: Garments Remain Core as Up-Value Strategies Mature

Garments represented 59.5% of the Indonesia textile manufacturing market share in 2024, testifying to the country’s deep sewing expertise and abundant workforce. Producers have moved beyond cut-make-trim to full-package services, offering design input, merchandising, and compliance documentation to brand customers. The fastest expansion occurs in technical and industrial textiles at 5.04% CAGR, reflecting infrastructure spending and automotive OEM localization.

Continued garment leadership also stems from Indonesia’s modest-wear niche, where brands merge traditional motifs with modern silhouettes for export markets. Integrated players that control upstream fabric and dyeing steps capture improved margins and ensure quality alignment with brand audits. Meanwhile, fabric-only producers channel more output into protective wear, filtration, and automotive components, reducing reliance on fashion cycles.

By Material Type: Recycled Fiber Momentum Signals Sustainability Shift

Synthetic fibers commanded 69.2% of the Indonesia textile manufacturing market size in 2024, underpinned by local PTA and MEG feedstock that reduce import dependence. Recycled polyester chips sourced from domestic PET bottles fuel a 6.41% CAGR for regenerated fibers, driven by brand mandates for traceable, lower-carbon inputs. Local spinners invest in bottle flake washing lines and melt-spinning systems to certify Global Recycled Standard compliance.

The government’s 35% import-substitution target bolsters demand for locally produced man-made fibers, while ongoing trials with ramie and kenaf explore bio-based alternatives. Producers balancing virgin and recycled grades safeguard supply continuity and hedge against crude-oil volatility. Sustainability labeling enhances export prospects, particularly in the EU where extended producer-responsibility schemes tighten over time.

Note: Segment shares of all individual segments available upon report purchase

By Application: Technical Textiles Emerge as a New Growth Lever

Apparel retained 72.4% of 2024 revenue but technical textiles grow faster at a 5.04% CAGR on the back of road-building, mining, and vehicle assembly. Domestic consumption of geotextiles, seat fabrics, and industrial filtration media has increased alongside government infrastructure roll-outs. Large mills allocate loom capacity to heavy-weave polypropylene and polyester fabrics that command premium margins over commodity garments.

Home textiles record steady demand from Indonesia’s growing middle class and hospitality projects, yet competition from imported bedding limits price recovery. Producers seeking higher yields increasingly integrate anti-microbial or water-repellent treatments, aligning with shifting consumer expectations. The technical segment’s capital intensity and performance requirements raise entry barriers, favoring established players with R&D capabilities.

Geography Analysis

Java’s entrenched industrial heritage, high-grade utilities, and deep subcontractor pool underpin its 76.4% share of the Indonesia textile manufacturing market in 2024. The island houses specialized zones such as MM2100 and Karawang Industrial City, where integrated waste-treatment and renewable-energy solutions lower operating costs and support brand sustainability audits. Nonetheless, higher minimum wages in West Java and mounting traffic congestion spur manufacturers to expand into Central Java, where municipal authorities offer quicker permitting and land-tax rebates.

Sulawesi’s 5.15% CAGR through 2030 stems from new spinning and knitting investments near Makassar that capitalize on competitive wage structures and ample industrial land. Emerging dry ports aim to shorten transit times to Tanjung Priok, though full benefits will depend on synchronized rail upgrades. Creative economy artisans in South Sulawesi supplement larger factories with niche weaving, enhancing regional jobs and preserving cultural techniques^{[3]Agus Fahmi, “Creative-Economy Craftsmen Resilience in South Sulawesi,” International Journal of Science and Engineering, ijse.or.id}.

Sumatra and Kalimantan attract capacity tied to their petrochemical clusters and pulp-and-paper supply. Producers explore waffle-weave and non-woven lines that serve agricultural applications, taking advantage of abundant biomass and easier environmental clearance than congested Java. While logistics costs remain a hurdle, ongoing port dredging and coastal road projects are expected to narrow the gap over the forecast period, making these islands more viable for medium-scale textile ventures.