Jakarta. Indonesia’s mandatory halal certification policy, set to take effect on Oct. 18, 2026, has drawn support from businesses, but industry groups are urging the government to simplify procedures and keep compliance costs from driving up production expenses and consumer prices.

Indonesian Employers Association (Apindo) Chairwoman Shinta W. Kamdani said businesses supported the policy as a means of protecting consumers and providing greater certainty. However, its effectiveness would depend on the readiness of the systems and ecosystem supporting its implementation.

“Industry needs four key things: certainty, simplification, harmonization and efficient compliance costs,” Shinta said on Tuesday.

She said the government needed to provide clear, written and consistent technical guidelines and standard operating procedures (SOPs) to prevent differing interpretations among regulators, surveyors, customs officials, businesses and overseas suppliers.

Certification and administrative procedures should also be integrated to eliminate duplication, she said, adding that existing systems, including the Online Single Submission (OSS) platform, should be optimized to prevent businesses from facing overlapping platforms and administrative requirements.

Shinta also called for broader recognition of halal certificates issued by foreign institutions.

For raw materials and products already certified by credible foreign halal institutions recognized by Indonesia, she said, the government should prioritize recognition rather than requiring recertification or repeated verification.

“The broader the recognition network, the easier it will be for Indonesia to connect with global supply chains without compromising the integrity of halal assurance,” she said.

Additional verification, inspections and administrative procedures could increase industries’ compliance costs, affecting not only companies but also lead times, inventory requirements, working capital and product pricing.

Ultimately, businesses could pass the additional costs of doing business on to consumers.

“Halal should create value, not unnecessary costs. Consumer protection must go hand in hand with product availability, affordability and industrial competitiveness,” Shinta said.

Certification as a Competitive Advantage
Institute for Development of Economics and Finance (Indef) Executive Director Esther Sri Astuti said halal certification could strengthen consumer confidence in products by providing greater assurance of their quality, cleanliness and halal status.

“With halal certification, consumers feel safer and more confident about the quality, cleanliness and halal status of products,” Esther said.

That trust could help micro, small and medium enterprises (MSMEs) strengthen their position amid increasingly intense business competition.

Halal certification could also provide additional value and differentiate products, particularly as consumers have more goods and services to choose from, she said.

Beyond the domestic market, certification could help businesses access wider markets, particularly in countries where consumers have specific halal requirements or preferences. As such, halal certification should not be viewed solely as a government-mandated obligation, but also as part of a broader strategy to improve business competitiveness.

Esther added that compliance with halal regulations could help businesses avoid potential administrative and criminal sanctions by ensuring their products meet prevailing legal requirements.

However, the requirements could pose challenges for MSMEs with limited capital and human resources.

Costs associated with raw material testing, registration and audits could add to the financial burden on small businesses. These expenses could rise further if businesses needed to adjust their supply chains to ensure that all materials met halal requirements.

Government Support Needed for MSMEs
Administrative requirements also remain a challenge for businesses seeking halal certification, Esther said.

Collecting documents, appointing halal supervisors and undergoing field audits require additional time and resources. For MSMEs with limited staff, these processes could divert attention from core activities such as production and marketing.

Small and traditional businesses unfamiliar with online registration systems, including the SIHALAL platform, could also struggle with the certification process because of limited digital literacy.

Esther said the government needed to strengthen assistance for MSMEs to ensure mandatory halal certification did not become an obstacle to business activities.

Broader access to technical guidance would be one necessary step.

“Technical guidance must be provided so MSMEs can apply for halal certification,” she said.

Such assistance would help businesses understand the certification process, prepare the necessary documents and navigate digital registration systems. With adequate support, she said, mandatory certification could instead become an opportunity for MSMEs to improve their business management and competitiveness.

Shinta, meanwhile, supported import substitution, provided it was implemented realistically and gradually, taking into account the availability, quality, specifications, volume and competitiveness of domestic raw materials.

Import substitution should not be forced when domestic industries are unable to supply materials at competitive prices and quality, she said, warning that doing so could increase production costs and ultimately push up consumer prices.

Shinta urged the government to develop the mandatory halal system around the principle of “high halal assurance with efficient cost of compliance.”

“We need high halal assurance with efficient cost of compliance, so halal becomes a competitive advantage rather than an additional cost disadvantage for Indonesian industries,” she said.

She also called for continued support for MSMEs through self-declare certification mechanisms and targeted government assistance. However, financing schemes should be designed proportionately to avoid creating additional financial obligations for businesses beyond existing requirements.

Ultimately, the success of mandatory halal certification should not be measured solely by the number of certificates issued, Shinta said.

“It should also be measured by its ability to protect consumers, maintain smooth supply chains and affordable prices, and strengthen the competitiveness of Indonesian industries,” she said.

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