The steep fuel price hike announced by the Indonesian government last week may force about 200 textile businesses into bankruptcy, causing 60,000 job losses, according to Indonesian Textile Association chairman Benny Sutrisno.

Increased fuel costs will cause a rise of up to $500 million in the textile sector's expected expenses this year.

Fuel prices were more than doubled on average last week as part of the government's plan to lessen the effects of retail fuel-price subsidies on its resources.

Indonesia's domestic product included about 13 per cent worth of textile exports last year.

The Indonesian Textile Association forecasts that the country's textile and clothing exports will increase 3.9 per cent to $7.9 billion this year as cheap producers such as China gain a stronger hold of the market.