If we asked you what the largest majority-Muslim country is, what first comes to mind? Iran? Pakistan? Egypt? Well, you might be surprised to learn that the answer is Indonesia, where approximately 87% of its 288.5 million people practice Islam. That means some 251 million consumers who are looking to shop halal. And what exactly that means in the country is about to change.
Indonesia is instituting a dramatic overhaul to its halal certification process for both domestically made and imported goods. While rigorous certifications are common in Muslim-majority countries for food and beverages, Indonesia is taking things a step further by applying labelling to a wider range of products including clothing, cosmetics, and even toilet paper. The rationale for the new mandate — itself a culmination of a law passed back in 2014 — is based on consumer protection and economic competition.
Ahmad Haikal Hasan, the head of Indonesia’s Halal Product Assurance Agency, also argues that the halal label has grown beyond just being a religious requirement and has become a global signifier trusted by all types of consumers. "Halal represents cleanliness, health, safety, and quality,” Hasan told the news agency Antara. “Today, halal is a market need, not merely a regulation."
However, many foreign businesses aren’t too pleased with the development, as the onus for certification falls on them and they’re not yet prepared. While halal certification is commonplace for food and beverage companies, the same cannot be said for other industries. The EU has gone so far as to say that being able to determine the halal status of things like chemicals and pharmaceuticals is “practically unfeasible” and that the mandate will cause “serious supply chain disruptions.” While non-halal products won’t be banned in Indonesia, they will carry a non-halal label, which would seriously impact sales.
This comes at a time when many nations are trying to boost trade with Indonesia, which is an emerging large consumer market. One such country is Canada, which last year inked a comprehensive bilateral free trade agreement with Indonesia — its first ever with a member of the ASEAN political and economic bloc. Once the deal is fully implemented, Indonesia will end or reduce duties on tariffs affecting 97% of existing trade from Canada, and Canada will end duties on tariffs representing 92% of existing trade from Indonesia. Canada gets full access into a booming market and Indonesia gets a foothold in a country with growing halal demand.
But will the new halal mandate create a sudden trade barrier for Canada? Luckily, it should dodge many of the headaches other exporters will face as the majority of its exports are focused on cereal grains like wheat, which would already be subject to halal regulations, and non-consumer-facing products like wood pulp and fertilizers. Unless Canada suddenly pursues, say, an aggressive push to send pharmaceuticals to Indonesia — for context, it exported a mere $7.3 million worth of drugs there in 2025 — the repercussions should be light compared to many of the country’s other trade partners.
