Istio-proxy still send encrypted data to pods


I have deployed istio on my dev EKS and I have enabled encryption.
when I try to connect my application I’m getting error 403 from my application.

I’ve started investigate the issue and I found that istio-proxy sending to my application encrypted packets instead of plaintext.

How can I resolve this issue?

There are two modes permissive mode and mtls mode. How do you set the policy?