From 18 October 2026, Indonesia will enter an important new phase in\nthe development of its halal industry. Mandatory halal certification\nwill be extended to cover micro and small enterprises (MSEs), imported\nproducts and various other product categories, in accordance with\nGovernment Regulation No.\u00a042 of 2024.<\/p>\n
This policy is not merely an administrative matter or a regulatory\nrequirement. It must serve as an instrument for industrialisation,\nstronger competitiveness and the creation of a new source of economic\ngrowth.<\/p>\n
But alongside this significant opportunity lies a fundamental\nchallenge: will this transformation create a productive and competitive\nhalal industry ecosystem, or could it become a new compliance burden for\nmillions of small businesses?<\/p>\n
The policy\u2019s value must not be measured simply by the number of\ncertificates issued. Its success will depend on whether it can boost\nproductivity, widen market access, create jobs and help Indonesian\nproducts succeed on the global stage.<\/p>\n
From obligation to economic opportunity<\/strong><\/p>\n Indonesia has a large domestic market and the world\u2019s biggest Muslim\npopulation. This policy should provide a foundation for building an\nintegrated halal industry. Halal is not just a product label; it\nencompasses the traceability of raw materials, production processes,\nstorage, distribution and the integrity of the supply chain.<\/p>\n Its economic potential is considerable. Data from the Halal Product\nAssurance Agency (BPJPH) show that halal value-chain activities\ncontribute around 27 per cent of national gross domestic product (GDP),\namounting to more than Rp4,900 trillion.<\/p>\n The Ministry of Industry recorded Indonesian halal-industry exports\nof US$35.72 billion in the first half of 2026, up 7.22 per cent on the\nsame period a year earlier. These figures show that Indonesia\u2019s halal\nindustry is no longer just a limited domestic market, but a strategic\npart of the global trading landscape.<\/p>\n Even so, high export figures do not necessarily mean that the\ndomestic industry controls the entire halal value chain. The real\nchallenge is to increase domestic value added, strengthen a self-reliant\nraw-material ecosystem and improve technological capacity in order to\nreduce reliance on imported inputs.<\/p>\n Without these strategic steps, Indonesia risks remaining a bustling\nconsumer market within the industry, rather than establishing itself as\na leading global producer of halal products.<\/p>\n Halal certification is important in giving consumers certainty and\nstrengthening market confidence. But certification is not the ultimate\ngoal of industrial development. A certified product does not\nautomatically become competitive in terms of price, quality, packaging,\nsupply consistency or marketing strategy.<\/p>\n MSEs that have met administrative requirements often still struggle\nto enter modern retail networks, the supply chains of large industries\nor export markets.<\/p>\n Mandatory halal certification should therefore be fully integrated\nwith programmes to build capacity and develop businesses. The Government\nmust ensure that certification goes hand in hand with support on\nstandards, easier access to finance, adoption of processing technology,\nimproved packaging design and wider distribution channels.<\/p>\n The Government must do more than regulate: it must also act as a\nfacilitator, building businesses\u2019 capabilities so that they gain\ntangible economic benefits.<\/p>\n MSEs must be the biggest beneficiaries<\/strong><\/p>\n The most urgent challenge is ensuring that millions of MSEs are\nready. Large businesses can generally absorb the costs of meeting\nstandards and adjusting to regulations more easily. By contrast,\nhome-based food sellers, traditional food producers and microbusinesses\nacross the country still face constraints in capital, technical\nknowledge, raw-material documentation and access to assistance.<\/p>\n If the obligation focuses only on deadlines and penalties, it could\nimpose a heavy compliance burden. Unprepared businesses may lose market\naccess, while larger firms benefit disproportionately. The Government\nmust balance enforcement with protection for microbusinesses by\nproviding simple, affordable and inclusive services, so that MSEs truly\nbecome the policy\u2019s main beneficiaries.<\/p>\n Four strategic steps should be prioritised. First, accelerate data\ncollection and readiness mapping by categorising MSEs according to\nlocation, business size, product type and production complexity.<\/p>\n Second, expand support networks. Assistance programmes should involve\nlocal governments, universities, Islamic boarding schools, business\nassociations, cooperatives and local communities, and reach production\ncentres in remote areas.<\/p>\n Third, optimise funding and provide certainty. The Government must\nensure that sufficient funding is available for free certification\nprogrammes and reaches the intended recipients. This must be accompanied\nby clear service timelines, transparent information on additional costs\nand a responsive complaints mechanism.<\/p>\n Fourth, ensure fair and phased oversight. Rules should be enforced\njudiciously, distinguishing between businesses that deliberately\ndisregard the requirements and those facing administrative obstacles.\nConsumer protection must remain the priority, without ignoring the\nactual capabilities of small businesses.<\/p>\n Building a national halal value chain<\/strong><\/p>\n The next task is to connect certification with industrialisation.\nIndonesia needs to build a halal value chain from upstream to\ndownstream, spanning agriculture, livestock, fisheries, raw-material\nindustries, food processing, pharmaceuticals, cosmetics, logistics and\ninternational trade. A government ministry or agency should lead this\neffort.<\/p>\n The relevant ministries and agencies must work within a shared policy\nframework. BPJPH is responsible for administering halal product\nassurance, while the ministries responsible for industry, trade,\nagriculture, fisheries, MSEs, tourism, the creative economy and finance\nmust ensure the availability of raw materials, increased production\ncapacity, financing and market access.<\/p>\n Partnerships between large industries and MSEs should also be\nstrengthened. Large companies can drive demand while providing\ntechnology transfer, support on standards, purchasing certainty and\nintegration of local suppliers. In this way, halal certification will\nnot simply add to MSEs\u2019 obligations, but will also help them enter\nindustrial supply chains.<\/p>\n At the same time, Indonesia needs to strengthen its halal economic\ndiplomacy. Mutual recognition of certificates, harmonisation of\nstandards and the reduction of trade barriers are essential if national\ncertification is to facilitate exports. Halal certification should open\nmarkets, not merely add another costly requirement.<\/p>\n Conclusion<\/strong><\/p>\n Ultimately, mandatory halal certification is a golden opportunity to\nalign consumer protection with economic growth. Indonesia has a large\nmarket, a substantial production base and strong social capital. But\nregulation and certificates alone will not unlock this potential.<\/p>\n A consistent policy approach from upstream to downstream is needed:\naccessible certification, ongoing business support, easier financing,\nindustrial integration and open access to markets. With this holistic\napproach, mandatory halal certification can become a strong foundation\nfor a productive, inclusive and globally competitive national\nindustry.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/making-indonesias-halal-industry-a-new-source-of-growth-1791733864",
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"sponsor": "Okusi Associates",
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