To boost the textile industry, the government is accelerating the completion of the EU-CEPA (European Union-Comprehensive Economic Partnership Agreement). Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized the importance of this agreement in enhancing competitiveness and expanding Indonesia's textile exports. The European Union remains the largest market for Indonesian textiles, accounting for nearly 30% of global demand, compared to around 15% from the United States. Learning from Vietnam's experience, which saw a 50% increase in imports after securing a comprehensive partnership with the EU, Airlangga stressed the urgency of finalizing the agreement to drive domestic industry growth.
In addition to trade agreements, the government is also launching a machinery revitalization package to strengthen the textile sector. A new regulation will soon be issued, with the government allocating IDR 20 trillion in investment subsidies to modernize textile machinery. Efficient machines are crucial for maintaining competitiveness in energy use and production speed. Furthermore, the government is offering subsidized investment credit for labor-intensive industries, including textiles, footwear, food and beverages, and furniture. This credit will have a 5% interest subsidy and an 8-year repayment period. Through these initiatives, the government aims to revive Indonesia's textile industry and enhance its global market presence.
