A ruling that bans the sale of imported textiles has been issued by the Indonesian government in a bid to support local manufacturers who are struggling to compete against cheap imports and rising manufacturing costs.

Industry and trade minister Rini Suwandi says the measures are aimed at preventing the illegal import of textiles into the Indonesian market, which has resulted in unfair trade and inflicted losses on local textile producers.

Under the new rules, which were signed on Tuesday, only local textile producers will be allowed to import textiles as a raw material or for supplementing the production process. The imported goods must not be sold or transferred to other companies.

The decree says that licensed textile-producers must seek approval from the government for the quantity and type of textiles they wish to bring into the country, and submit monthly reports on their imported goods. Import licenses will be revoked if authorised importers fail to submit monthly reports.

The government was forced to step in after local producers complained that uncontrolled cheap imports, particularly from China, are affecting their earnings. Up to 650 manufacturers closed last year and another 673 either downsized or merged their operations, according to figures from the Central Bureau of Statistics.

Indonesian textile exports have also fallen from US$8.2 billion in 2000 to $7.6 billion last year, and there are fears that this could decline further following the recent bomb attack in Bali.