Indonesia Textiles Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Indonesia Textiles Market Trends and Insights

Middle-Class Fashion E-Commerce Boom Lifting Domestic Yarn & Fabric Orders

Indonesia’s fashion category led all online retail in 2024, and live-video commerce captured roughly one-quarter of gross merchandise value. Domestic converters that can deliver 500 to 2,000 meter lots within 10 days now receive rolling orders from direct-to-consumer labels on major platforms. Payment cycles shorten, improving cash flow, but order fragmentation raises planning complexity. The October 2024 removal of unregistered foreign sellers reduced price undercutting, yet parcel-level imports continue through other channels. On balance, steady urban disposable-income growth keeps online fashion a bright spot for polyester-cotton prints and dyed knits^{[1]Ministry of Trade, “E-Commerce Market Monitoring Report 2024,” kemendag.go.id}.

Acceleration of Machine-Modernization Subsidies Under Making Indonesia 4.0

Jakarta’s IDR 20 billion program reimburses up to 25% of qualified textile equipment purchases, directly targeting the 57% of looms and spindles that are more than 15 years old. Early adopters—mainly mid-sized spinners in West and Central Java- pair the rebate with bank loans to upgrade to air-jet looms and compact-spinning lines. Domestic machine builders secure a captive market through the local-content clause, although high-precision gear still arrives from Germany and Japan on the lower 10% rebate tier. Mills must show operating profitability and valid environmental permits, conditions that exclude distressed firms most in need of upgrades. Over the medium term, the scheme is expected to lift run speeds and lower defect rates, modestly improving export competitiveness^{[2]Ministry of Industry, “Machinery Revitalization Scheme Guidelines 2025,” kemperin.go.id}. 

Preferential Tariffs From IA-CEPA and Prospective CPTPP Entry Expanding Export Margins

Under IA-CEPA, Indonesian yarn and fabrics enter Australia at zero or near-zero duty, with flexible yarn-forward rules supporting global fiber sourcing. The EU-Indonesia CEPA finalized in 2025 will phase out textile tariffs over seven years, contingent on labor and environmental compliance. Jakarta’s pending CPTPP accession would open the Canada, Japan, and Mexico markets, where Indonesian goods still face MFN tariffs. Together, the accords could raise average export margins by 2–4% points for mills capable of meeting origin and traceability documentation.

Brand Mandates for Recycled-Fiber Content Sparking PET-to-Yarn & Viscose-Recycling Investments

Global sportswear and fast-fashion buyers now demand 20–50% recycled content, prompting Indonesian fiber majors to scale bottle-to-polyester lines and closed-loop viscose. PT Indorama Polypet is piloting chemical recycling that depolymerizes post-consumer PET, while Asia Pacific Rayon markets viscose produced with renewable energy. Mechanical recycling remains limited by fiber-strength loss, yet chemical processes require USD 50–100 million per line and consistent feedstock, challenges partly offset by large buyers’ willingness to sign multi-year offtake contracts. The absence of national extended producer responsibility legislation still constrains raw material supply 

Weakening Rupiah Amplifying Cotton & Synthetic-Feedstock Import Costs

The rupiah fell beyond IDR 16,500 per USD by March 2025, intensifying the landed prices of imported cotton and polyester staple fiber that cover over 95% of spinning needs. Spinners operating at just 40–50% utilization lack the working capital to hedge or bulk-buy, eroding already thin margins. Although a cheaper currency theoretically aids exports, simultaneous 6.5% wage hikes nullify much of the benefit. The overall effect is a direct squeeze on cash-constrained mills^{[3]USDA Foreign Agricultural Service, “Indonesia Cotton and Products Update 2025,” fas.usda.gov}.

Sharp Hikes in 2025 Provincial Minimum Wages Narrowing Advantage Versus Vietnam & Bangladesh

Regulation 16/2024 lifted 2025 minimum wages by 6.5% in key textile provinces, pushing Central Java pay to about USD 122 per month. This reduces Indonesia’s labor-cost gap against Vietnam, where improved logistics already offset higher wages, and keeps the country above Bangladesh’s USD 95. Large exporters shoulder the increase; smaller cut-make-trim shops face thinner spreads and higher turnover, complicating order fulfillment

Segment Analysis

By Application: Fashion Leads While Technical Textiles Accelerate

Fashion and apparel controlled a dominant 56.16% share of Indonesia textiles market size in 2025, reflecting the archipelago’s deep garment-making base. Yet margin compression and import competition have slowed its growth to low single digits. Industrial and technical textiles, though smaller, are the fastest-growing niche at a 4.12% CAGR, propelled by demand for filtration media, medical disposables, and automotive upholstery. Several OEMs now insist on local sourcing to meet domestic-content rules, opening avenues for mills able to certify flame retardancy, tensile strength, and traceability. Government incentives for hospital construction similarly expand orders for gowns and drapes, supporting capacity investments in non-woven spunbond and meltblown lines. Over the forecast horizon, technical fabrics are expected to capture incremental share as buyers seek specification-driven suppliers and as fashion volumes plateau.

A more balanced application mix also cushions the Indonesian textiles market against fashion-cycle volatility. Mills entering automotive and geotextile supply chains must adopt rigorous quality systems and often partner with global licensors for proprietary yarns or coatings. While only a handful of domestic plants presently meet airbag or seat-belt specifications, early movers report higher margins and longer contracts than basic fashion programs. The shift requires sustained R&D spending and closer collaboration with end users, but it offers a viable path to offset rising wages and tougher environmental standards.

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

By Raw Material: Synthetic Fiber Dominance, Polyester Momentum

Synthetic fibers secured 43.96% of Indonesia textiles market share in 2025, with polyester the standout, projected to grow at a 4.51% CAGR up to 2031. Brand-level recycled-content mandates and polyester’s cost edge over cotton underpin this momentum. Domestic PET-to-fiber projects by PT Indorama and others will eventually reduce reliance on imported recycled chips, but feedstock collection remains informal. Cotton, long favored for premium Shirting and denim, faces currency-driven cost swings and a smaller discretionary-income pool, keeping its share under pressure. Viscose from Asia Pacific Rayon is gaining traction in athleisure and home textiles where biodegradable claims resonate with EU buyers. Nylons and other engineering synthetics remain niche but carry attractive margins in tire cords and fishing gear, markets still served predominantly by imports.

Greater synthetic penetration also changes process choices: knitters use polyester-rich blends for stretch jerseys, while non-woven producers prefer polypropylene and polyester webs for hygiene applications. As sustainability auditing spreads, life-cycle analysis increasingly dictates fiber choice. Mills that can provide verifiable chain-of-custody documentation, whether for recycled polyester or responsibly sourced viscose, are likely to win share from commodity cotton spinners tethered to volatile global prices.

By Process: Woven Fabric Scale, Non-Woven Upside

Woven fabrics commanded 48.16% of Indonesia textiles market share in 2025, anchored by apparel-grade shirtings and home-textile jacquards produced on large air-jet fleets. Yet non-woven output is rising at a 4.05% CAGR as diaper, wipe, and medical-mask makers scale capacity. Spunbond lines commissioned since 2023 have rapidly filled previously import-dominated hygiene substrates, giving local roll-goods suppliers a growing captive client base. Knits still serve fast-turn fashion, but commodity jerseys face import penetration from China and Vietnam.

Capital intensity remains the key hurdle in shifting the process mix. A high-speed spunbond line costs USD 10–15 million, while a set of advanced rapier looms requires far less investment per kilogram of output. Nevertheless, the labor-light, specification-heavy nature of non-wovens appeals to investors seeking margin stability and export scalability. Mills adopting inline optical inspection and lamination units position themselves for future demand in composite geotextiles and medical barrier fabrics, underpinning the segment’s long-run growth trajectory.

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

Geography Analysis

Java generated 58.37% of Indonesia's textile market value in 2025, supported by dense supply chains, skilled labor, and proximity to Tanjung Priok and Tanjung Perak ports. Yet tighter effluent rules and wage growth are nudging some expansion toward lower-cost zones. Sumatra follows, buoyed by Asia Pacific Rayon’s renewable-energy viscose complex and by emergent garment clusters around Medan that feed domestic retailers. Infrastructure gaps and higher trucking costs still limit Sumatra’s scale compared with Java, but new toll roads and ferry links are gradually reducing logistical drag.

Outside the traditional belt, the Rest of Indonesia, including Sulawesi, Kalimantan, and eastern provinces are projected to log the fastest 3.71% CAGR to 2031. Government outlays on ports, power, and special economic zones encourage investors to diversify capacity, especially in non-water-intensive processes like spunbond and knitting. Tourism-rich Bali sustains artisan batik and hand-woven niches that benefit from rising inbound travel and export-handicraft demand. However, talent shortages and limited upstream suppliers mean most large mills still favor Java for complex operations, using satellite units elsewhere for finishing or assembly.

Archipelagic geography forces a hub-and-spoke model: raw fiber and chemicals land at Java ports, move to integrated complexes for spinning or polymerization, and then ship finished yarn or fabric to outer-island garment plants near their end markets. Policy makers aim to shorten these loops through localized upstream investment, but current economics continue to favor Java’s clustering advantages.