KUALA LUMPUR — In a milestone development for the region’s burgeoning Islamic economy, Malaysia and Indonesia—the two largest halal economies in Southeast Asia—have officially established a joint halal council. This high-level bilateral initiative is designed to align their respective certification regimes and ease the commercial passage of certified goods across their borders, arriving at a critical juncture when both nations are concurrently tightening their regulatory frameworks.
The announcement was made by Malaysia’s Deputy Prime Minister on September 25 during the Global Halal Summit, a premier industry gathering held alongside the Malaysia International Halal Showcase in Kuala Lumpur. Under the newly minted framework, Indonesia’s Halal Product Assurance Organizing Agency, widely known as BPJPH, will assume the chairmanship of the council. Meanwhile, Malaysia will take on the crucial secretary-general role, with the Department of Islamic Development Malaysia (JAKIM) expected to act as the primary secretariat. The inaugural meeting of the council is formally scheduled for October, with its core mandate focused on mutual certification facilitation and the systematic reduction of duplicate bureaucratic procedures.
Building on 2023
This newly formed council does not emerge from a vacuum, but rather builds directly upon foundational agreements forged in recent years. In 2023, BPJPH and JAKIM signed a pivotal memorandum of understanding recognizing each other’s halal certificates for domestic products. Under this arrangement, each agency was formally listed as a recognized certification body within the other’s market. At the time of signing, JAKIM announced that certified Malaysian products and officially approved logos would be permitted to enter the Indonesian market without unnecessary restriction.
That crucial memorandum has since been extended to run through June 2029. Furthermore, intensive bilateral negotiations aimed at streamlining certification and bilateral trade officially concluded in June, paving the way for both countries to begin accepting each other’s respective halal logos.
The economic stakes driving this regulatory alignment are substantial. Trade data reveals that Malaysia shipped approximately RM7.77 billion worth of halal-certified products to Indonesia between 2021 and 2023 alone. Moreover, Malaysia’s incoming ambassador to Indonesia has estimated the total annual bilateral trade in halal-related goods and services to be between US$2 billion and US$3 billion, underscoring the vital commercial importance of removing friction at the border.
The Agenda: Fewer Repeated Procedures
Addressing the assembly during the announcement, Malaysia’s Deputy Prime Minister emphasized that the primary mission of the joint council will be to tackle long-standing challenges, including differing halal requirements, redundant administrative procedures, and the complex hurdles that businesses routinely face when attempting to penetrate a neighboring market. In his framing, ultimate success will be measured by tangible metrics: fewer regulatory barriers, significantly easier market access, and a higher volume of commercial enterprises successfully trading across national borders.
A significant portion of this strategic focus is directed toward smaller and medium-sized producers. Current figures indicate that only about 14.7 per cent of Malaysia’s halal-certified companies currently engage in exporting, even though the broader halal sector accounts for roughly 11 per cent of the nation’s total Gross Domestic Product. Malaysia has established an ambitious national target of reaching approximately RM80 billion in halal exports by 2030. To achieve this, small-scale manufacturers require a much clearer, frictionless route to international buyers, alongside robust institutional support in fulfilling their initial export orders.
Navigating complex bureaucratic procedures is precisely where this targeted support will matter most. Under current policies, Indonesia officially exempts imported goods certified by a foreign body that holds a formal recognition agreement from undergoing separate domestic national certification. However, the system still mandates that the foreign certificate be officially registered through BPJPH’s online portal, a processing window that can take up to 20 working days. On the other side, Malaysia permits a formal halal description on imported goods provided they are certified by a body recognized by JAKIM, with that specific certifying body’s name clearly marked on the product. Establishing a standing forum for both regulatory agencies provides a natural venue for harmonizing these procedural steps, although neither government has yet specified which administrative processes will be prioritized first.
Roles and Rhetoric
The division of labor within the council reflects the complementary strengths of the partnership as articulated by participating officials. According to Malaysia’s Deputy Prime Minister, Malaysia contributes deep, decades-long institutional experience in rigorous standards, governance, and trade facilitation. Indonesia, by contrast, brings immense market scale, vast domestic production capacity, and vibrant entrepreneurial dynamism.
The head of BPJPH struck a broader philosophical and economic chord during the discussions, describing halal not merely as a religious observance, but as a universal standard of transparency, traceability, and uncompromising quality that ultimately benefits all consumers. He lauded Malaysia as a natural and indispensable partner given its long history in the sector, noting that this bilateral council serves as a crucial stepping stone toward an eventual ASEAN-wide halal council. He also reiterated Indonesia’s steadfast national ambition to establish itself as a premier global hub for the halal industry.
Indonesia’s Changing Rules
The timing of this bilateral alignment is particularly noteworthy given the shifting regulatory landscape in Indonesia. The country’s strict halal certification deadline for imported food, beverages, and slaughtered products is fast approaching on October 17, 2026. Adding to this regulatory evolution, a BPJPH regulation signed in August introduces a mandatory pre-shipment conformity check for imports, which must be conducted by an authorized inspection body directly 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 developments are formally on the agenda for the upcoming October council meeting, the timing is striking. For Malaysian exporters navigating these shifting requirements, the establishment of a direct, standing communication channel between the two regulatory agencies offers immense added value during a period of considerable transition.
Commercial Support
Recognizing that diplomatic and regulatory alignment must be matched by commercial enablement, Malaysia is pairing this intergovernmental track with robust trade support initiatives. At the same summit, the Malaysia External Trade Development Corporation (MATRADE) and JAKIM formally exchanged letters of intent regarding the launch of the Malaysia Halal Global Nexus. Under this new initiative, MATRADE officers stationed at overseas diplomatic missions will actively guide Malaysian businesses through the intricacies of the country’s domestic halal ecosystem, promote international recognition of Malaysian certification standards, and aggressively market halal exports to foreign buyers.
The Regional Goal
Looking beyond bilateral ties, Malaysia’s Deputy Prime Minister has formally proposed launching an ASEAN Halal Council in Malaysia in September 2027. Under the proposal, Malaysia stands fully prepared to host the permanent secretariat—subject to the formal agreement of all ASEAN member states—while Indonesia has been proposed as the inaugural chair. The comprehensive proposal has already been formally submitted to the ASEAN Secretariat and is slated to be presented before the upcoming ASEAN Summit for official endorsement. The Deputy Prime Minister views this regional body as an essential building block toward an even larger, global ambition: the establishment of a proposed World Halal Development Council.
The underlying market logic supporting these grand structural ambitions is straightforward. By official estimates, the ASEAN region is home to more than 250 million halal consumers, while worldwide Muslim consumer spending is projected to reach approximately US$3.56 trillion by 2029. Emphasizing the practical nature of the initiative, the Deputy Prime Minister stressed that any regional body must possess a clear mandate, concrete operational priorities, and be judged purely by its ability to reduce trade barriers and facilitate market access.
The upcoming October meeting is expected to supply the first definitive details regarding the initiative, including a published agenda, clear terms of reference, initial workstreams dedicated to certification alignment, and a firm timetable for the broader ASEAN proposal. For Malaysian halal exporters and the government agencies supporting their international expansion, the meeting will offer a clear indication of how rapidly a shared regulatory framework can translate into shorter, more efficient pathways to one of the world’s largest consumer markets.