After years of being labelled a "sunset industry" by sceptical observers, Indonesia's garment and textile sector is showing signs of a durable re-rating. The industry grew 6.36 per cent year-on-year in the second quarter of 2026, up from 4.35 per cent a year earlier, and exports of textiles and textile products reached $8.15 billion in the first eight months of the year, generating a trade surplus of $2.18 billion . Within this recovery, a group of exporters is emerging as the new standard-bearers of Indonesian manufacturing—companies that combine scale, vertical integration, and an ability to navigate the shifting geopolitics of global apparel sourcing.
The macro backdrop is more favourable than it has been in years. The global ready-to-wear apparel market is projected to reach roughly $1.80 trillion in 2026, and Indonesia's apparel exports alone contributed $5.90 billion to the total textile and textile product exports in the January–August period, representing 72.4 per cent of the sector's export value and a 2.8 per cent increase year-on-year . Investment in the apparel sector reached 4.63 trillion rupiah in the first half of 2026, up from 4.14 trillion rupiah in the same period of 2025, with new garment factories opening in Central Java and West Java . The government's Industry 4.0 framework aims to propel Indonesia into the world's top five textile and garment producers by 2030, supported by a 100 trillion rupiah investment programme .
At the apex of the private sector stands Busana Apparel Group, one of Indonesia's largest export-oriented garment manufacturers. Founded in 1975 from a small factory in Ungaran, the group now operates dozens of manufacturing facilities across Indonesia and Ethiopia, employs more than 26,000 workers, and produces over 47 million pieces annually for leading global brands across denim, active sportswear, casual wear, and formal wear . With annual turnover exceeding $500 million, Busana is the benchmark against which other Indonesian exporters are measured, and its management has signalled that 2026 has been a stronger year, with capacity expansion underway at several facilities .
The group's competitive advantage lies not merely in scale but in its integrated service model. As a one-stop shop covering design, pattern making, cutting, and finished product delivery, Busana occupies a position in the value chain that few Indonesian competitors can match . Its geographic diversification—with production facilities in Ethiopia as well as Java—provides a hedge against the tariff and trade policy volatility that has reshaped global sourcing since 2025. For European and American buyers seeking to reduce concentration risk in any single country, Busana's multi-country footprint is a meaningful differentiator.
A second tier of listed and private exporters is also gaining momentum. PT Trisula International Tbk (TRIS), a publicly traded textile and garment company with more than 50 years of operating history, reported a 20.3 per cent increase in export sales in the first half of 2026, reaching 530.5 billion rupiah, with exports now accounting for approximately 60 per cent of total sales . Net profit rose 12.2 per cent to 57.9 billion rupiah, driven by a strategy of export market diversification and the optimisation of Indonesia's trade agreements . Trisula's manufacturing segment remains its largest revenue contributor at 703.8 billion rupiah, and the company has begun allocating capital expenditure toward machine rejuvenation and higher-value product development .
The company's performance is notable because it has been achieved despite the geopolitical turbulence that has disrupted global trade flows. Trisula's president director, Widjaya Djohan, attributed the resilience to market diversification and the ability to serve customers who prioritise quality consistency, production flexibility, and multi-skill manufacturing capability . This positioning—as a reliable, mid-to-high-complexity manufacturer rather than a low-cost volume player—reflects a broader strategic shift among Indonesian exporters who recognise that competing on price alone against Vietnam and Bangladesh is a losing proposition.
A different model of export success is represented by PT Hansae Indonesia Utama, the Majalengka-based subsidiary of South Korea's Hansae Co. Ltd. Operating as an OEM and ODM for brands including H&M, Vans, DKNY, Guess, and Zara, Hansae's Indonesian facility combines high-technology production management with barcode-based quality tracking and benefits from the parent group's global network spanning Vietnam, Myanmar, Guatemala, Nicaragua, and Haiti . The Majalengka plant illustrates how foreign direct investment continues to shape Indonesia's garment export landscape, bringing not only capital and jobs but also access to the design and merchandising capabilities that global brands demand.
The Korean investment model is distinct from the domestic-led exporters in one critical respect: it is embedded in a multinational production network that can shift orders between countries depending on tariff regimes, labour costs, and logistics. For Indonesia, this represents both an opportunity and a vulnerability. The opportunity is that Hansae and similar foreign-invested manufacturers bring scale and technical sophistication that lift the entire ecosystem. The vulnerability is that their loyalty to any single location is contingent on competitiveness, and a deterioration in Indonesia's cost structure or regulatory environment could prompt a reallocation of orders elsewhere.
Among smaller and newer entrants, a generation of design-led brands is testing the export waters with a different value proposition. Zama Homewear, a Malang-based brand founded by Srie Dewi Wirautami, has penetrated markets in South Korea, Singapore, Malaysia, Switzerland, and several European countries through diaspora networks and online channels, built on a foundation of embroidered homewear and a mission of empowering women artisans . With 97 per cent of its team and artisans being women, and a practice of upcycling production waste into secondary products, Zama represents the emergence of a sustainability-oriented, craft-intensive export segment that appeals to niche European buyers .
The company was awarded first place in the 2026 East Java Outstanding MSME competition and represented Indonesia at the World Expo 2025 in Osaka, and is now preparing for a year-end exhibition at Kobe Hankyu in Japan . Its trajectory suggests that Indonesian garment exports are not solely a story of large-scale contract manufacturing; there is also space for smaller, brand-driven exporters who can leverage cultural distinctiveness and sustainability credentials to access premium niches.
Government policy is actively shaping this landscape. The Ministry of Industry has identified ageing machinery as a critical constraint, with Industry Minister Muhammad Sarmuji warning that "without modernisation, our industries will find it increasingly difficult to survive and compete with other countries" . A restructuring programme for machinery and equipment in the textile and apparel sector has been prepared, alongside the optimisation of the Labour-Intensive Industry Credit (KIPK) programme and efforts to secure adequate gas supply at specific prices . The workforce in the textile and textile products industry is targeted to increase to 4.07 million by 2029 from 3.95 million in 2026 .
Yet the policy environment is not without tension. The Indonesian Textile Association (API) has warned that the draft Labour Protection Bill, if enacted, could deter investment and lead to factory closures within one to two years, citing the expansion of criminal sanctions from six articles in the existing labour law to 33 in the proposed legislation . The association has also raised concerns about restrictions on outsourcing, which many textile companies rely on for capacity sharing, particularly in West Java where large firms may outsource up to 20 per cent of production . These regulatory risks sit alongside more familiar challenges: energy and logistics costs, raw material availability, and competition from imported goods, both legal and illegal .
The raw material question is particularly significant for the sector's export competitiveness. Indonesia's reliance on imported raw fabric, estimated at $4.56 billion, exposes manufacturers to exchange rate fluctuations and supply chain disruptions . The government's ambition to develop integrated supply chain ecosystems in Central and West Java is intended to address this gap, but progress will take years. In the interim, exporters with vertical integration or secure supplier relationships—such as Busana and Trisula—enjoy a structural advantage over smaller competitors.
Trade diplomacy is emerging as another lever. Deputy Trade Minister Dyah Roro Esti Widya Putri has emphasised the importance of maximising trade agreements and expanding market access, noting that partnerships such as the one with Singapore-based DORS should evolve beyond exhibitions into long-term business relationships . Indonesian exporters have also been active in trade missions, with eight companies participating in the Global Sourcing Expo in Sydney in 2026 and recording potential transactions of $3.5 million, targeting the Australian textile and apparel import market which reached AUD 1.768 billion in April 2026 alone .
The investment pipeline offers further evidence of confidence. In October 2026, Investment Minister Rosan Roeslani met with H&M Group and nine of its supply chain partners from China and Hong Kong, discussing nine new factories in Java covering yarn dyeing, weaving, knitting, finishing, and garment production . The involvement of H&M, one of the world's largest apparel buyers, signals that Indonesia remains a credible destination for supply chain investment despite the sector's structural challenges. For the government, such investments validate the strategy of moving up the value chain rather than competing solely on labour costs.
For investors and buyers assessing Indonesia's garment exporters, the picture that emerges is of a sector in transition. The large, established players—Busana, Trisula, and the foreign-invested manufacturers—offer scale, reliability, and increasingly sophisticated capabilities. The emerging brands and smaller exporters offer design distinctiveness and sustainability narratives that appeal to specific market segments. Between them lies a gap in mid-sized, export-oriented companies that can combine design capability with production scale, and it is this gap that determines whether Indonesia can achieve its ambition of entering the top five global producers.
The risks are real: regulatory uncertainty, raw material dependence, infrastructure costs, and the ever-present competition from Vietnam and Bangladesh. But the trajectory of 2026 suggests that the pessimism of the "sunset industry" narrative was misplaced. Indonesia's garment exporters are not merely surviving; they are reinvesting, diversifying, and moving into higher-value segments. The rising stars of this cycle are those that have understood that the future of garment manufacturing lies not in cheaper labour, but in reliability, design, and the ability to navigate an increasingly fragmented global trading system.