China Sweden Japan plans to invest in Indonesia's textile industry

In the second half of 2025, Sweden, China and Japan will invest in the textile and textile products (TPT) sector in Indonesia, focusing on downstream products such as fabrics and more environmentally friendly dyeing processes.The Director General of Chemical, Pharmaceutical and Textile Industries of the Ministry of Industry said that investments will be focused on downstream products such as fabrics close to garments. In response to Japan, Indonesia will develop mechanisms to reduce carbon emissions in the fabric dyeing process and reduce electricity consumption from coal by reducing boiler use. The finalization of Indonesia's Comprehensive Economic Partnership Agreement (CEPA) with the European Union, which is expected to be signed in Jakarta in September 2025 and come into effect in 2026, will allow Indonesia to receive tariff reductions on approximately 80% of its exports. The European market has strict standards in terms of sustainability and Indonesia's ability to meet these standards, including requirements on chemicals used in the dyeing process, has attracted foreign investment. The Economic Coordinating Minister said that after the signing of the agreement, all provisions will come into effect in 2026, which is expected to accelerate the realization of 0% tariffs.