Jakarta – Indonesia’s Industry Ministry is developing a comprehensive strategy to ensure that imported raw materials adhere to halal standards, a move prompted by the nation’s heavy reliance on overseas supplies – approximately 70% of inputs, according to officials. The initiative aims to fortify Indonesia’s halal ecosystem, protecting it from upstream to downstream production processes.
The plan, unveiled Tuesday at the 99th Indonesian Sharia Economists Forum in Jakarta, comes as Indonesia increasingly prioritizes the development of its halal industry. The government’s New National Industrialization Strategy will employ both backward and forward linkage approaches to meticulously trace supply chains, a critical step in verifying the halal integrity of imported goods. Ensuring halal imports is becoming increasingly important for Indonesia’s economic growth.
Challenges of Imported Raw Materials
“Raw materials are one of the main challenges,” explained Emmy Suryandari, head of the Industry Standardization and Services Policy Agency at Indonesia’s Industry Ministry. “If upstream production is domestic, tracing is easier. But when most inputs are imported, it becomes more complex.” The ministry is responding by preparing measures to qualify imported materials as halal, including stricter documentation requirements, enhanced coordination with the Halal Product Assurance Agency (BPJPH) and efforts to harmonize international halal standards.
Industries have often faced difficulties in producing halal-certified goods when their imported inputs do not fully meet the necessary standards, particularly as halal markets continue to evolve. To address these challenges and strengthen the overall ecosystem, the ministry has issued a 2025–2029 halal industry development roadmap, formalized under Industry Minister Regulation No. 40/2025. This roadmap outlines six key programs designed to embed halal standards into industrial operations.
Roadmap for Halal Industry Development
The six key programs within the roadmap focus on several critical areas. These include drafting detailed technical rules to integrate halal standards into industrial processes, expanding essential infrastructure such as halal inspection bodies, raw material centers, and logistics systems, and upgrading information platforms to facilitate transparency and traceability. Additional measures will concentrate on developing a skilled workforce through cross-ministerial collaboration, streamlining halal certification processes with the BPJPH and the Trade Ministry, and offering incentives to businesses operating within designated halal industrial zones.
The pharmaceutical sector has been identified as particularly critical, with up to 90% of its raw materials currently sourced from imports, according to Suryandari. The ministry is advocating for a gradual substitution of imported materials with domestically produced alternatives, acknowledging that this process will require time and regulatory approvals. “Substitution takes time, including regulatory approvals. We are coordinating with BPJPH to identify materials that are difficult to certify while ensuring compliance,” she stated.
The government is also actively encouraging industries to prioritize domestic sourcing whenever possible, while simultaneously developing transition policies to support sectors that remain heavily reliant on imports. This multifaceted approach aims to balance the need for halal compliance with the practical realities of global supply chains.
US Product Halal Certification
Relatedly, Indonesia is also enforcing halal certification requirements for products originating from the United States. According to recent reports, these certifications can be carried out in the country of origin through Mutual Recognition Agreements (MRAs). Currently, five foreign halal institutions in the US are recognized by the BPJPH, allowing for streamlined registration of products already certified to halal standards in the US.
Under the MRA mechanism, products that have obtained halal certification in their country of origin do not need to repeat the full certification process in Indonesia, but are required to undergo a registration process. Kris Sasono, Head of the Halal Industry Center at the Ministry of Industry, explained that both the foreign institution’s logo and Indonesia’s halal logo are affixed to the products. Periodic supervision remains in place, as MRAs have a limited validity period of between two and four years.
Indonesia has established MRAs with approximately 38 countries, involving 102 foreign halal institutions, including five in the United States, eight in China, and thirteen in Australia. Government officials emphasize the importance of maintaining these agreements to facilitate trade while upholding halal standards.
The ongoing efforts to strengthen halal standards and streamline certification processes reflect Indonesia’s commitment to becoming a global leader in the halal economy. The next phase will likely focus on implementing the 2025-2029 roadmap and fostering greater collaboration between government agencies, industry stakeholders, and international partners.
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