Improvement Efforts to Boost Indonesia's Sharia Business Market Share

A report issued by the State of the Global Islamic Economy Report in 2025 indicates growth in the global Islamic economy, with Indonesia ranked fourth in the world. However, Indonesia’s position has fallen from its previous third-place ranking, now trailing behind Malaysia, the United Arab Emirates, and Saudi Arabia. This demonstrates that the nation largely remains a consumer in the overall development of the sharia economic concept. For instance, consumption of various halal products in Indonesia is quite high, yet it remains confined to consumption alone. Consequently, Indonesia still lags behind countries like Brazil and Australia in developing halal meat exports. Indonesia also trails Japan in developing Muslim-friendly tourism, even though this tourism concept is not exclusive in nature. As a country with a Muslim-majority population founded on Pancasila, Indonesia should be able to develop Muslim-friendly tourism that is not only enjoyable for various groups but also accessible to tourism industry players, both Muslim and non-Muslim, as an implementation of the muamalah concept. The sharia economic concept itself is accessible to all groups. Muslim-friendly tourism, as part of this concept, can also serve as a tourism standard suitable for all family members across ages, covering aspects such as cleanliness of tourist sites, featured attractions, regional advantages, natural beauty, and the hygiene of food and beverages consumed at the locations. This should be a competitive advantage unique to Indonesia. Furthermore, in developing an integrated sharia business concept, many remain trapped in a paradigm overly focused on certification within the sharia business industry, including the halal industry. Fundamentally, certification is more of an entry point for industry development rather than the ultimate goal. In Indonesia, the halal certificate paradigm is treated as extremely important and has become the end goal itself. The crucial question should be ‘what is the next step?’ after industry players obtain halal certification. This lack of follow-up remains a frequent question from SME players whose entire business is halal culinary. Based on past discussions held by the National Committee for Sharia Economics and Finance and the Center of Excellence Governance and Policy Studies at BINUS University, the halal certificate issue should no longer be a problem. Under the latest regulations in Indonesia, halal certification is no longer voluntary but has become mandatory. Thus, the issue of halal or halal certification should theoretically be resolved. However, it must be acknowledged that obstacles remain regarding the governance concept of the halal industry and Muslim-friendly tourism in Indonesia. There are several areas requiring attention. This writing focuses specifically on the synergy between sharia financial institutions and real sector business players. The first is assessing whether the sharia financial industry is optimally supporting other sharia business industries, such as the food, beverage, and non-food halal sectors, given that the market share of sharia finance in Indonesia remains small. Data from the Financial Services Authority indicates that the market share of Islamic banks in Indonesia still hovers between 7 and 10 percent. There is also a gap in understanding among SME players regarding the role of sharia finance in advancing the halal industry, with access still perceived as expensive. This suboptimal condition hampers Indonesia’s ambition to become not just a global halal industry hub but also a centre for the sharia financial economy. Therefore, several steps need to be taken. The first is a shift in mindset, ensuring the nation does not merely serve as a market but also becomes a producer in the sharia business industry. There should be no more fragmented policies among different institutions, ministries, the Halal Product Assurance Organising Body, regional governments, and financial regulators such as the OJK overseeing sharia financial institutions.