This research investigates the declining competitiveness of Indonesia’s textile exports amidst
increasing global environmental concerns and rising foreign direct investment (FDI) inflows. It aims
to analyze how FDI affect the Indonesia textile export competitiveness under low-carbon constraints.
Using time series from 2008 to 2023, the study applies a regression model with Porter's Diamond
framework, incorporating FDI, CO₂ emissions, current account balance as the percentage of GDP,
and transportation and warehouse GDP as variables. The results show that FDI, CO₂ emissions, and
the transportation and warehousing balance negatively and significantly impact export
competitiveness, while current account balance as the percentage of GDP has a significant positive
effect. As a countermeasure, the study suggests that Indonesia should shift its FDI policy toward
promoting innovation, sustainability, and global value chain integration, while encouraging green
investment and improving infrastructure. This research provides valuable insight into enhancing
industrial competitiveness in a sustainable and globally integrated manner.