KUALA LUMPUR — In a milestone move for Southeast Asia’s booming Islamic economy, Malaysia and Indonesia have formally established a joint halal council designed to bridge their certification regimes and drastically ease the cross-border movement of halal-certified goods.
The initiative marks the most concrete step yet toward realizing a unified regional halal framework within the Association of Southeast Asian Nations (ASEAN). As both countries concurrently tighten their domestic regulatory landscapes, the newly minted bilateral council aims to eliminate procedural bottlenecks, curb administrative duplication, and foster smoother trade corridors for businesses operating in the world’s two largest halal economies.
Malaysia’s Deputy Prime Minister announced the creation of the council on September 25 during the Global Halal Summit, a prominent gathering held alongside the Malaysia International Halal Showcase (MIIS) in Kuala Lumpur. Under the agreed governance structure, Indonesia’s Halal Product Assurance Organizing Agency, commonly known as BPJPH, will take the helm as chair, while Malaysia will assume the secretary-general role. The Department of Islamic Development Malaysia, widely recognized as JAKIM, is slated to serve as the secretariat. The inaugural meeting of the council is scheduled for October, with its primary mandate focused squarely on mutual certification facilitation and the systematic reduction of redundant regulatory procedures.
Building on 2023
The establishment of the joint council does not represent a starting from scratch, but rather a deepening of institutional ties initiated in recent years. In 2023, BPJPH and JAKIM signed a landmark memorandum of understanding designed to formally recognize each other’s halal certificates for domestic products. Under that framework, each agency was listed as a recognized certification body within the other’s market. At the time of the signing, JAKIM noted that certified Malaysian products and accompanying logos would be permitted to enter Indonesia without unnecessary restrictions.
That foundational memorandum has a lifespan extending through June 2029. Following intensive bilateral negotiations that successfully concluded in June, the Deputy Prime Minister confirmed that both nations have officially begun accepting each other’s halal logos.
The commercial stakes underpinning this alignment are substantial. Between 2021 and 2023, Malaysia shipped approximately RM7.77 billion worth of halal-certified products to Indonesia. Furthermore, Malaysia’s incoming ambassador to Indonesia estimates the total annual bilateral halal-related trade to be worth between US$2 billion and US$3 billion.
The Agenda: Fewer Repeated Procedures
When unveiling the council, the Deputy Prime Minister emphasized that its core mission is to tackle the persistent challenges posed by differing halal requirements, repeated bureaucratic procedures, and the daunting hurdles businesses routinely face when attempting to penetrate neighboring markets. In his framing, ultimate success will be measured by tangible metrics: fewer regulatory barriers, significantly easier market access, and a higher volume of companies successfully trading across their shared border.
A critical focus of this initiative is empowering smaller producers. Currently, only about 14.7 percent of Malaysia’s halal-certified companies actively export their goods, despite the broader halal sector contributing roughly 11 percent to the nation’s gross domestic product. Malaysia has set an ambitious target of reaching approximately RM80 billion in halal exports by 2030. To achieve this, small-scale manufacturers require a much clearer pathway to international buyers and dedicated institutional support in fulfilling their initial export orders.
Navigating complex regulatory procedures is precisely where this bilateral support is expected to make a meaningful difference. Under current rules, Indonesia exempts imports from separate national certification provided they are certified by a foreign body covered by a mutual recognition agreement. However, these foreign certificates must still be formally registered through BPJPH’s online system, a processing procedure that can take up to 20 working days. Meanwhile, Malaysia permits a clear halal description on imported goods provided they are certified by a body recognized by JAKIM, with the certifying body’s name visibly marked on the product. The creation of a standing forum for both agencies provides a natural, efficient venue for aligning such administrative steps, though neither government has yet specified which procedures will be prioritized first.
Roles and Rhetoric
The institutional division of labor reflects the cooperative spirit emphasized by officials from both nations. According to the Deputy Prime Minister, Malaysia contributes decades of deep expertise in standards formulation, regulatory governance, and trade facilitation. In contrast, Indonesia brings immense market scale, robust production capacity, and vibrant entrepreneurial energy to the partnership.
The head of BPJPH offered a broader perspective during the summit, describing the halal concept not merely as a religious compliance standard, but as a universal benchmark for transparency, traceability, and overall quality that benefits all consumers. He lauded Malaysia as a natural partner given its extensive historical experience in the sector, noting that the bilateral council serves as a vital stepping stone toward an eventual ASEAN-wide council while reiterating Indonesia’s grand ambition to firmly establish itself as a global halal hub.
Indonesia’s Changing Rules
The timing of this bilateral alignment is particularly significant given the evolving regulatory climate in Indonesia. The country’s upcoming halal certification deadline for imported food, beverages, and slaughtered products is fast approaching on October 17, 2026. Compounding these changes, a BPJPH regulation signed in August introduces a mandatory pre-shipment conformity check for imports, to be conducted by an authorized inspection body directly at the loading warehouse. On September 10, BPJPH publicly named four qualified inspection bodies to carry out these assessments.
While officials have not yet clarified whether these specific regulatory shifts are officially on the joint council’s immediate agenda, the establishment of a standing communication channel between the two regulatory agencies provides invaluable stability. For Malaysian exporters, the inaugural October meeting arrives right in the middle of this complex regulatory transition, underscoring the practical value of a continuous bilateral dialogue.
Commercial Support
To complement the high-level diplomatic and regulatory track, Malaysia is aggressively rolling out commercial trade support mechanisms. At the same summit, the Malaysia External Trade Development Corporation (MATRADE) and JAKIM formally exchanged letters of intent concerning the Malaysia Halal Global Nexus. Under this initiative, MATRADE officers stationed overseas will provide hands-on guidance to Malaysian businesses navigating foreign halal ecosystems, actively promote the international recognition of Malaysian certification, and drive the marketing of halal exports abroad.
The Regional Goal
Looking beyond bilateral trade, the Deputy Prime Minister has formally proposed launching an ASEAN Halal Council hosted in Malaysia by September 2027. Under the proposal, Malaysia would be prepared to host the permanent secretariat—subject to the formal agreement of all member states—while Indonesia is proposed as the inaugural chair. The proposal has already been formally submitted to the ASEAN Secretariat and is slated to go before the upcoming ASEAN Summit for official endorsement. The Deputy Prime Minister envisions this regional body as a crucial building block toward an even larger ultimate objective: the creation of a proposed World Halal Development Council.
The underlying economic logic driving these initiatives is straightforward. By conservative estimates, ASEAN is home to more than 250 million halal consumers, while total global Muslim consumer spending is projected to reach approximately US$3.56 trillion by 2029. Emphasizing that the proposed regional body must maintain a clear mandate and concrete priorities, the Deputy Prime Minister reiterated that its success should ultimately be judged by the reduction of trade barriers and the simplification of market access.
The upcoming October meeting is expected to deliver the first wave of operational details, including a published agenda, clear terms of reference, initial joint workstreams on certification, and a concrete timetable for the broader ASEAN proposal. For halal exporters in Malaysia and the government agencies supporting them, the meeting will provide a crucial early indicator of how quickly a shared regulatory framework can translate into shorter, more efficient pathways into a massive regional market.