Halal Products: The Neglected Powerhouse of the World Economy, How Indonesia Can Benefit from It
By Teguh Anantawikrama,
Vice Chairman of the Indonesian Chamber of Commerce and
Chairman of the Indonesian Tourism Investors Club
INVESTORTRUST.ID – The global halal industry, covering food, fashion, cosmetics, pharmaceuticals, and daily consumables, is a multi-trillion-dollar market with vast untapped potential. Despite over 1.9 billion Muslim consumers worldwide and a growing non-Muslim demand for halal-certified products, this sector remains underdeveloped as an economic driver.
Countries that invest in halal industries can gain a competitive edge in global trade. But, many—including Indonesia—have yet to fully capitalize on this opportunity.
The Economic Strength of Halal Industries
The halal market is projected to surpass $7 trillion by 2030, with key sectors driving this growth:
• Halal food & beverages: Valued at over $2 trillion, increasingly sought after for its hygiene, ethical sourcing, and quality standards.
• Halal fashion: Estimated at $375 billion, driven by modest fashion trends gaining global popularity.
• Halal cosmetics & pharmaceuticals: Surpassing $200 billion, fueled by the demand for ethical, organic, and safe products.
• Halal tourism: A projected $300 billion industry by 2030, catering to Muslim travelers seeking faith-friendly destinations.
Insufficient Government Support
Despite this rapid growth, many governments and businesses still overlook the halal sector, leaving its potential largely untapped. Several key challenges prevent the halal industry from reaching its full potential:
2. Limited branding and innovation: Many halal businesses fail to market their products beyond Muslim-majority markets.
3. Underinvestment in infrastructure: Halal production requires modern logistics, but many countries lack the necessary technological advancements.
4. Insufficient government support: Unlike high-tech industries, halal businesses receive limited incentives, funding, and policy attention.
Without addressing these barriers, countries risk losing market share to more proactive players.
How Indonesia Can Benefit from the Halal Economy
As the world’s second largest Muslim-majority country, Indonesia has a golden opportunity to position itself as a global leader in the halal industry. However, while Indonesia is a major consumer of halal products, it is still not a top exporter.
To maximize its economic benefits, Indonesia must take proactive measures to dominate the global halal market:
1. Strengthening Halal Certification and Standardization.
A unified and internationally recognized Indonesian halal certification can increase global trust in Indonesian halal products and improve export potential. The Indonesian Ulema Council (MUI) and the Halal Product Assurance Agency (BPJPH) must work towards streamlining halal certification to attract international buyers.
2. Expanding Indonesia’s Halal Export Market.
Currently, Indonesia imports more halal products than it exports. To reverse this trend, Indonesia must:
• Invest in halal manufacturing and logistics to become a global supplier.
• Strengthen trade agreements with BRICS, GCC, and Organization of Islamic Cooperation (OIC) countries for halal product exports.
• Promote Indonesian halal brands in global markets through digital platforms and international trade shows.
3. Developing Halal Tourism as a Global Attraction.
With its rich cultural heritage and natural beauty, Indonesia can be the top halal tourism destination by:
• Enhancing Muslim-friendly infrastructure, including halal restaurants, prayer facilities, and Shariah-compliant hotels.
• Promoting Bali, Lombok, and other regions as prime halal tourism spots.
• Partnering with airlines and travel agencies to create exclusive halal travel packages.
4. Encouraging Digitalization & E-Commerce for Halal Products.
The global e-commerce boom presents a major opportunity for Indonesian halal businesses. By embracing digital platforms and fintech solutions, Indonesia can:
• Expand halal product exports through e-commerce giants like Amazon, Alibaba, and local platforms like Tokopedia and Shopee.
• Develop Indonesia’s own global halal marketplace to connect local producers with international buyers.
• Utilize blockchain and AI for transparent halal supply chain tracking.
5. Government and Private Sector Collaboration.
Indonesia must foster strong public-private partnerships to accelerate the growth of the halal economy. Key initiatives include:
Indonesia must foster strong public-private partnerships to accelerate the growth of the halal economy. Key initiatives include:
• Tax incentives for halal businesses to encourage production and exports.
• Investment funds and grants for halal startups and SMEs.
• Halal industry education and training programs to develop skilled professionals.
Indonesia Must Act Now
The global halal industry is no longer just a niche market—it is a trillion-dollar economic powerhouse. If Indonesia positions itself as a leader, it can strengthen its economy, create jobs, and enhance its global trade presence.
Indonesia has the market size, resources, and strategic location to dominate the halal economy. The time to act is now—before other countries seize this opportunity. ***