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The ministry views IEU-CEPA as a strategic tool to help Industry leaders anticipate that growth will be led by
Indonesia achieve its goal of eight percent economic growth value-added, sustainable and design-driven products following
by 2029. a relatively stable and consolidative performance in 2025.
The agreement will provide wider market access for While prospects are improving the recovery is expected
Indonesian products in the EU and offer several advantages, to unfold gradually and selectively across markets.
including tariff reductions for most exports. Despite the positive outlook, the industry continues

to face internal challenges such as high financing costs,
Chamber of Commerce proposes furniture industry efficiency pressures, inconsistent raw material supplies and
incentives rising compliance costs linked to sustainability certifications,
The Indonesian Chamber of Commerce and Industry (Kadin) particularly for MSMEs.
met with Finance Minister, Purbaya Yudhi Sadewa, to discuss External risks include volatile logistics costs, intense
deregulation and incentives for the national furniture industry. competition from Vietnam and China and stricter trade policies
Kadin Chairperson, Anindya Novyan Bakrie, highlighted including the EU’s deforestation regulation and US tariffs.
that while the global furniture market is worth around US$300 To address these challenges, HIMKI is prioritising a green
billion Indonesia contributes only about US$2.5 billion. industry strategy focused on sustainability, productivity, product

Although the industry’s growth remains healthy, he noted differentiation and stronger branding while emphasising the need
that Indonesia’s trade surplus is shrinking due to rising imports. for supportive government policies to maintain competitiveness.
The proposed incentives include access to financing with
more competitive interest rates and support for resource-based Opportunities for performance-based REDD+ financing
industrialisation, such as for the rattan sector. in regions
Anindya also stressed the need to diversify export markets Indonesia’s Ministry of Forestry has created opportunities
as nearly 60 percent of Indonesia’s furniture exporters still rely for performance-based financing for the implementation of

on the US, while there is potential for expansion to Canada the REDD+ scheme at the regional level emphasising the
and the European Union. importance of strong collaboration between the central and
HIMKI Chairperson, Ahmad Sobur, urged the government regional governments.
to provide financial support pointing out that exporters Forestry Minister, Raja Juli Antoni, highlighted that national
currently access loans at around six percent interest through
the Indonesian Export Financing Institution (LPEI).
In response, Finance Minister Purbaya said the government pxhere.com
would review LPEI’s internal condition before expanding incentive
support for the furniture industry through the institution.

Furniture and craft industries anticipate a rebound in
export demand
Indonesia’s furniture and handicraft industry is optimistic about
an export market rebound in 2026 supported by expectations
of global monetary policy easing and improving consumer
sentiment.