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 dramatically ease the cross-border movement of halal-certified goods.
The announcement, delivered by Malaysia’s Deputy Prime Minister on September 25 at the Global Halal Summit held alongside the Malaysia International Halal Showcase, marks the most concrete step yet toward realizing a unified regional halal framework for the Association of Southeast Asian Nations (ASEAN). Under the newly minted framework, Indonesia’s Halal Product Assurance Organizing Agency, known as BPJPH, will chair the council. Meanwhile, Malaysia will assume the secretary-general role, with the Department of Islamic Development Malaysia (JAKIM) expected to act as the primary secretariat. The council’s inaugural meeting is scheduled for October, with a core mandate centered on mutual certification facilitation and the systematic reduction of duplicate bureaucratic procedures.
Building on the Momentum of 2023
The creation of the joint council does not start from a blank slate. It builds heavily on bilateral agreements struck in 2023, when BPJPH and JAKIM signed a landmark memorandum of understanding recognizing each other’s halal certificates for domestic products. Under that arrangement, each agency was listed as a recognized certification body within the other’s market. At the time, JAKIM noted that certified Malaysian products and official logos could enter Indonesia without undue restriction.
That memorandum remains in effect through June 2029. Furthermore, intensive negotiations regarding the practical facilitation of certification and bilateral trade concluded in June, paving the way for both countries to officially begin accepting each other’s halal logos.
The economic stakes are exceptionally high. Between 2021 and 2023 alone, Malaysia shipped RM7.77 billion worth of halal-certified products to Indonesia. Moreover, Malaysia’s incoming ambassador to Indonesia estimates the total annual halal-related trade between the two neighbors ranges between US$2 billion and US$3 billion, underscoring the vital importance of smoothing trade friction between the region’s two largest halal economies.
Targeting Redundancies and Empowering Small Producers
Addressing the assembly during the council’s announcement, the Deputy Prime Minister emphasized that the bilateral body will directly tackle differing halal requirements, repeated procedures, and the chronic difficulties smaller businesses face when attempting to enter neighboring markets. In his framing, ultimate success will be measured by fewer regulatory barriers, smoother market access, and a higher volume of companies successfully trading across borders.
Special emphasis is being placed on small and medium enterprises (SMEs). Currently, only about 14.7 per cent of Malaysia’s halal-certified companies export their goods, even though the broader halal sector accounts for roughly 11 per cent of 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 manufacturers urgently require a clearer, less convoluted route to overseas buyers, alongside targeted support in fulfilling their first export orders.
Bureaucratic procedures represent the exact friction point where such support is most crucial. Currently, Indonesia exempts imports certified by a foreign body possessing a recognition agreement from separate national certification, but it still requires the foreign certificate to be officially registered through BPJPH’s online system—a process that can take up to 20 working days. On the other side, Malaysia permits a clear halal description on imported goods provided they are certified by a body recognized by JAKIM, with that certifying body’s name visibly marked on the product. Establishing a standing forum for both national agencies provides a natural venue for aligning these administrative steps, though neither government has yet specified which procedures will be prioritized first.
Complementary Strengths and Strategic Visions
The organizational division of labor reflects the cooperative spirit emphasized by officials from both nations. According to Malaysia’s Deputy Prime Minister, Malaysia contributes decades of deep expertise in established standards, regulatory governance, and trade facilitation. In contrast, Indonesia contributes massive market scale, expansive domestic production capacity, and vibrant entrepreneurial drive.
The head of BPJPH offered a broader philosophical perspective, describing halal integrity not merely as a religious requirement, but as an international standard of transparency, traceability, and quality that ultimately benefits all consumers. He praised Malaysia as a natural partner given its extensive, long-standing experience in the sector, noting that the bilateral council serves as a vital stepping stone toward a broader ASEAN-wide council, while reiterating Indonesia’s grand ambition to cement its status as a global halal hub.
Navigating Indonesia’s Changing Regulatory Landscape
The timing of this bilateral alignment is particularly critical. Indonesia’s strict mandatory halal certification deadline for imported food, beverages, and slaughtered products is fast approaching on October 17, 2026. Furthermore, a BPJPH regulation signed in August introduces a mandatory pre-shipment conformity check for imports, which must be conducted by a designated inspection body right at the loading warehouse. BPJPH officially named four qualified inspection bodies for this purpose on September 10.
While officials have not yet clarified whether these specific regulatory updates are formally on the upcoming council agenda, the timing ensures that the first meeting will take place right in the middle of a major regulatory transition. This dynamic grants the new standing channel between JAKIM and BPJPH immense immediate value for Malaysian exporters attempting to navigate shifting compliance landscapes.
Bolstering Commercial Support Networks
To complement the diplomatic and regulatory alignment, Malaysia is simultaneously advancing robust trade support initiatives. At the same summit, the Malaysia External Trade Development Corporation (MATRADE) and JAKIM exchanged formal letters of intent concerning the Malaysia Halal Global Nexus. Under this initiative, MATRADE officers stationed at overseas diplomatic missions will actively guide Malaysian businesses through the intricacies of the national halal ecosystem, promote international recognition of Malaysian certification, and aggressively market halal exports abroad.
Toward a Regional and Global Halal Architecture
Looking beyond bilateral ties, Malaysia has formally proposed launching an ASEAN Halal Council in September 2027, with Malaysia prepared to host the permanent secretariat—subject to the formal agreement of all ASEAN member states—and Indonesia proposed as the inaugural chair. This visionary proposal has already been submitted to the ASEAN Secretariat and awaits formal endorsement at the upcoming ASEAN Summit. Proponents view it as a crucial foundational building block toward an even larger proposed World Halal Development Council.
The underlying market logic is compelling. ASEAN is home to more than 250 million halal consumers, while global Muslim consumer spending is projected to skyrocket to approximately US$3.56 trillion by 2029. The Deputy Prime Minister stressed that any regional body must maintain a clear mandate, concrete priorities, and be judged strictly by its tangible results—specifically, fewer trade barriers and easier market access.
The upcoming October meeting is expected to deliver the first wave of concrete operational details, including a published agenda, clear terms of reference, initial workstreams dedicated to certification harmonization, and a definitive timetable for the ASEAN proposal. For Malaysian halal exporters and the agencies backing them, the meeting will serve as a vital indicator of how quickly a shared diplomatic framework can successfully translate into smoother, shorter pathways to one of the world’s largest consumer markets.