The Strengthening Halal Pulse
In busy port lanes, from Tanjung Perak Surabaya to land logistics nodes spreading into industrial zones, East Java is moving not only as a space for goods production but also as a growing ground for new values that increasingly determine the direction of global trade. That value is halal, which has now ceased to be merely an administrative label and has instead transformed into a cross-border economic language. Within that framework, East Java positions itself as one of the crucial nodes in the national halal value chain. This position is reinforced by a combination rarely possessed by other regions: a vast base of Islamic boarding schools (pesantren), the strength of micro, small, and medium enterprises, a developing manufacturing industry, and interconnected logistics infrastructure.
Data presented in a regional economic forum shows this stirring does not exist in a vacuum. East Java’s economy in the first quarter of 2026 grew by 5.96 percent year-on-year, surpassing the national average of 5.61 percent. On the other hand, the export value of halal products reached approximately 3.222 billion US dollars, with the number of halal businesses growing by more than 40 percent compared to the previous year. This figure indicates not only expansion but also an acceleration of adaptation to new global standards.
At the global level, the State of the Global Islamic Economy 2025/2026 report places Indonesia as a major player in several halal economy sectors, including Muslim fashion, which ranks first in the world, and a top-three position in halal food. However, this achievement simultaneously carries a crucial message: being a producer alone is insufficient without mastering the value chain from upstream to downstream.
The most fundamental change in today’s halal industry lies in how it forms value networks. Halal is no longer just about raw materials and production processes, but also about traceability, safety standards, distribution ethics, and environmental sustainability. In other words, halal has moved towards becoming a complex and interconnected economic ecosystem. In this context, the East Java Provincial Government is pushing for ecosystem strengthening through the development of halal industrial zones, including the Halal Industrial Park Sidoarjo, as well as the empowerment of thousands of Islamic boarding schools that serve as community-based production centres. More than seven thousand pesantren are involved in strengthening the community’s economy, with thousands of them having implemented a one-pesantren-one-product programme.
This transformation is important because one of the main challenges of the halal industry in Indonesia has been the fragmentation of small business actors. Many potential products fail to penetrate wider markets due to limitations in certification, production standards, and logistics access. It is here that pesantren and MSMEs become strategic nodes that not only produce but also internalise halal standards as part of business culture. However, this ecosystem still faces substantial homework. Firstly, halal literacy among small business actors remains uneven. Secondly, the cost and process of certification, although simplified, remain a challenge for some micro-businesses. Thirdly, the integration of the halal supply chain from raw materials to distribution is still not fully solid. Without improvements at these points, the halal ecosystem risks growing unevenly, with large industries accelerating faster while small players are left behind.