Halal certification is entering a new phase in Indonesia. After years\nof being understood primarily as a consumer protection instrument and a\nreligious obligation, halal has now become part of trade infrastructure.\nFood and beverage products, cosmetics, natural medicines, health\nsupplements, chemical products, and various consumer goods will\nincreasingly be bound by the halal product assurance regime.<\/p>\n
A critical milestone is 18 October 2026, when the next stage of\nmandatory halal certification comes into effect. Its scope targets not\nonly domestic products, including MSMEs, but also foreign products\nentering and traded within Indonesia. At this juncture, an economic\nquestion must be raised: halal certification, which should create added\nvalue, must not transform into a source of high economic costs.<\/p>\n
Ultimately, halal is not merely a matter of labelling. It involves\npricing, competitiveness, trade flows, logistics costs, investment,\nservice speed, and the ability of businesses, especially MSMEs, to enter\nthe market. There is no reason to pit consumer protection against\nbusiness interests; both must progress together. The market potential is\nvast. The State of the Global Islamic Economy 2025\/26 report estimates\nthat global Muslim consumer spending across six Islamic economic sectors\nreached US$2.60 trillion in 2024 and is projected to rise to US$3.56\ntrillion by 2029.<\/p>\n
Indonesia holds a strategic position. Bank Indonesia noted that the\nhalal value chain grew by 6.21% in 2025, with its contribution to the\nnational economy increasing. This data suggests that halal certification\nshould be positioned as an economic driver, helping Indonesian products\ngain trust, expand markets, enter global supply chains, and improve\nmarket access.<\/p>\n
The problem arises when every regulatory obligation creates a new\nlayer of cost. If certification requires administrative fees,\ninspections, testing, assistance, changes in production processes, raw\nmaterial adjustments, and recurring compliance costs, then all these\nexpenses will eventually be reflected in the price structure. For large\ncompanies, this may be absorbed through economies of scale, but for\nMSMEs, the story is different.<\/p>\n
Therefore, the measure of success for halal policy should not merely\nbe the number of certificates issued. We must also ask: how much cost\nmust businesses bear to obtain and maintain these certificates? How long\nis the process? How many inspections are conducted? And is the cost\nproportionate to the economic benefit?<\/p>\n
Criticising the potential for a high-cost economy does not mean\ndenying the government\u2019s various breakthroughs. In 2026, BPJPH is\nproviding 1.35 million free halal certificates for MSMEs through the\nSEHATI programme. BPJPH data also shows the ecosystem is expanding; as\nof 7 September 2026, over 4.4 million halal certificates have been\nissued, covering approximately 14.6 million products, mostly from\nMSMEs.<\/p>\n
However, free certification does not automatically mean compliance\ncosts are zero. Businesses may still face indirect costs, such as time\nspent managing documents, preparing raw material data, adjusting\nproduction processes, maintaining ingredient consistency, and meeting\nvarious administrative requirements. In other words, regulatory costs\nare not just the rupiah paid to certification bodies; they also include\ncosts of time, transaction costs, information costs, and opportunity\ncosts. This is what is often overlooked in the halal certification\ndiscourse.<\/p>\n
The issue of a high-cost economy becomes even more relevant when\nlooking at the Halal Product Assurance Agency Regulation Number 4 of\n2026 regarding the Assurance of Conformity for Foreign Halal Products\nEntering Indonesia. This regulation was established on 7 August\n2026.<\/p>\n
In principle, the substance is understandable. Halal certificates\nshould not remain mere administrative documents. The government needs to\nensure that products actually shipped to Indonesia match the products\nthat have obtained certification. Consequently, the new regulation\nintroduces a Halal Product Assurance mechanism, which includes\nadministrative verification and limited physical conformity inspections.\nInspections are conducted in the loading country and\/or the country of\norigin before products are shipped to Indonesia.<\/p>\n
Importers must ensure various information, including product\nidentity, certificate or registration number, HS code, quantity or\nvolume, production code, production date, product unit, halal label or\nnon-halal notation, and trade documents. The results are recorded in a\nHalal Product Assurance Report (LPPH), which becomes part of the customs\ndocumentation. This mechanism is integrated with electronic systems and\nthe Indonesia National Single Window.<\/p>\n
From a consumer protection standpoint, this mechanism has strong\nrationality. However, from an economic perspective, a question cannot be\nignored: will this mechanism serve as a layer of certainty or rather a\nnew layer of cost? This is where the design of implementation becomes\ncrucial. BPJPH Regulation No.\u00a04\/2026 establishes a more detailed\nmechanism for imported products. Based on available technical\nexplanations, the related LPPH applies to a single shipment or entry\naccording to the data listed. For importers with high shipment\nfrequencies, the characteristics of this per-shipment requirement need\ncareful consideration.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/do-not-let-halal-certification-become-a-high-cost-economy-1790582120", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }