The country, which has conducted 19 rounds of talks over the past nine years related to the proposed agreement, aims at concluding the negotiations in the first half this year.
In general, the agreement has three main pillars: market access for trade in goods and services, investment and public procurement, and harmonisation of trade regulations, as well as cooperation and capacity building.
In addition to expanding the export market, the government has also introduced domestic policies to enhance the competitiveness of the textile industry, especially medium and small enterprises (SMEs), coordinating minister for economic affairs Airlangga Hartarto said.
The EU is the largest market for Indonesian textile products, accounting for around 30 per cent of global demand for such products.
The Indonesian government has initiated strategic steps to achieve this, including a machinery revitalisation programme, with regulations to be issued soon.
The government has allocated an investment subsidy of Rp 20 trillion ($1.2 billion) to support modernisation of production equipment, as per domestic media reports.
To support labour-intensive industries such as textiles, shoes, furniture and leather, the government has also prepared an investment credit scheme with an eight-year duration and a 5-per cent interest subsidy.
With these measures, the government aims to revive the textile sector and create more jobs once the IEU-CEPA is implemented.
ALCHEMPro News Desk (DS)
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