Opportunities and Challenges of Indonesia’s Halal Industry: A Qualitative Analysis

Abstract

Indonesia, as the country with the largest Muslim population in the world, holds significant potential for the development of the halal industry, both in terms of the domestic market and global opportunities. With more than 244 million Muslims, Indonesia represents a highly strategic captive market for halal products and services. The government has taken substantial measures through the establishment of the Halal Product Assurance Agency (BPJPH) and the enactment of Law No. 33 of 2014 on Halal Product Assurance. However, the realization of halal industry development still faces fundamental challenges, such as regulatory complexity, low levels of halal literacy, limited infrastructure, and the relatively weak competitiveness of Indonesian products in international markets compared to competing countries such as Malaysia and Thailand. This study employs a qualitative approach based on literature review using content analysis of accredited journals and official government data. The findings reveal a significant gap between market potential and the implementation of halal certification, with only around 30% of MSME products being halal-certified. On the other hand, opportunities for halal industry development remain vast, in line with the global trend of ethical consumerism and government support through the Indonesian Islamic Economic Masterplan 2019–2024. The study concludes that strengthening halal literacy, simplifying regulations, enhancing infrastructure capacity, and adopting global branding strategies are key for Indonesia to transform from merely being a large consumer of halal products into a leading global producer with strong competitiveness